Question: Standard & Poor's announced in 2001 that it was considering integrating free-float adjustments to its existing practices for the S&P Australian index. It said that

Standard & Poor's announced in 2001 that it was considering integrating free-float adjustments to its existing practices for the S&P Australian index. It said that it would use a measure called Investable Weight Factor (IWF) to reflect a company's free float. A full free-floated company will have an IWF of 100 percent. For others, the IWF will be adjusted downward by subtracting the percentage of shares that are not freely available for trade. Now consider three Australian manufacturing companies: Alpha, Beta, and Gamma. Alpha owns 5 percent each of Beta and Gamma. Gamma owns l5 percent of Beta. Taking into account the cross-holdings, what will be the IWF of each company?

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