Question: Given the following information on five stocks, construct: a. A simple price-weighted average b. A value-weighted average c. A geometric average d. What is the
Given the following information on five stocks, construct: a. A simple price-weighted average b. A value-weighted average c. A geometric average d. What is the percentage increase in each average if the stock prices change to those in Column I? e. What is the percentage increase in each average if the stock prices change from those in the Price column to those in Column II? f. Why were the percentage changes different in parts (d) and (e)? g. If you were managing a fund and wanted a source to compare your results to, which of the three averages would you prefer to use, and why?
| Stock | Price | # of Shares | I | II |
| A | $ 12.00 | 150,000 | $ 12.00 | $ 12.00 |
| B | $ 14.00 | 125,000 | $ 14.00 | $ 14.00 |
| C | $ 11.00 | 200,000 | $ 20.00 | $ 11.00 |
| D | $ 22.00 | 80,000 | $ 22.00 | $ 22.00 |
| E | $ 8.00 | 30,000 | $ 8.00 | $ 15.00 |
| F | $ 29.00 | 140,000 | $ 29.00 | $ 29.00 |
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