Question: Please answer both parts showing work a. You purchase a stock for $7.50 at the beginning of Month 1. It takes on a value of
Please answer both parts showing work
a. You purchase a stock for $7.50 at the beginning of Month 1. It takes on a value of $8.00 at the end of Month 1, and a value of $7.75 at the end of Month 2. What is your holding period return on this investment over the both months (i.e., the two-month holding period return, to the nearest decimal)?
b. Stock A has an initial price of $200, 50 shares outstanding, and a 1-period realized return of 12%. Stock B has an initial price of $50, 100 shares outstanding, and a 1-period return of 7%. What is the 1-period return on a price-weighted index comprised of both stocks, a value-weighted index, and an equal-weighted index?
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