Not all stock market indexes are created equal. Different methods are used to calculate various indexes, and different indexes will yield different assessments of market performance. Pick 3 publicly listed firms and construct a price-weighted index and a value-weighted index at the beginning of January 2023 (on the first trading day of this year), respectively. Assume that you sell the index on the last trading day of January.

a. Compute the monthly return on the price-weighted index. b. Compute the monthly return on the value-weighted index. c. Compare the two returns and explain their differences.

THESE ARE 3 FIRMS AND THE INFORMATION:

APPLE:

Price Jan 3= $124.88

Price Jan 30= $142.78

Shares outstanding: 15.82B

Market Value: $1.976 trillion

GOOGLE:

Price Jan 3= $89.7

Price Jan 30= $97.95

Shares outstanding: 5.97B

Market Value: $536.229 billion

TESLA:

Price Jan 3= $108.10

Price Jan 30= $166.66

Shares outstanding: 3.16B

Market Value: $341.596 billion