Question: Consider a hypothetical equal-weighted index created using the three stocks below: Stock Price o n 1/28/21 Price o n 7/28/21 Outstanding Shares (mil) on 1/18/21
Consider a hypothetical equal-weighted index created using the three stocks below:
| Stock | Price on 1/28/21 | Price on 7/28/21 | Outstanding Shares (mil) on 1/18/21 | Outstanding Shares (mil) on 7/28/21 |
| A | $80 | $67 | 5000 | 5000 |
| B | 100 | 112 | 2500 | 2500 |
| C | 50 | 60 | 6000 | 6000 |
None of the stocks pay dividends.
On 1/28/21, as a young asset manager, you were asked by a client to create a portfolio to track the said three-stock equal-weighted index. You did exactly as ask and created this tracking portfolio with an initial investment of $31,000.
On 7/28/21, you conducted a routine re-balance in order to reset the portfolio weights to equal weights. How many shares of Stock A did you need to buy?
Round your answer to the nearest whole number.
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