Question: An analyst considers different indices that could be constructed from stocks A, B, and C given the information below. In particular, the analyst considers

An analyst considers different indices that could be constructed from stocks A,

 

An analyst considers different indices that could be constructed from stocks A, B, and C given the information below. In particular, the analyst considers all 6 combinations given by the 3 different weighting methods (value-weighted, equally-weighted, and price-weighted) and the 2 different return definitions (price return, total return). Stock Beginning-of- End-of-period A B C period price 10.00 20.00 30.00 price 12.00 20.50 30.00 # Shares outstanding Dividends per throughout period share 1.00 0.50 0.30 100 100 200 Which of the 6 indices would yield the highest return for the period? Which of the 6 indices would yield the lowest return?

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