Question: please answer question 2. step by step. Problem 2(16pts) We want to form an index using the five stocks presented in the below table: A.

 please answer question 2. step by step. Problem 2(16pts) We want

please answer question 2. step by step.

Problem 2(16pts) We want to form an index using the five stocks presented in the below table: A. Calculate the rate of return on an equally weighted index for the first period (from t=0 to t=1 ) if stock-D price at the end of period 1(P1,D) is equal to $42?(3pts) B. Calculate the rate of return on an price weighted index for the first period (from t=0 to t=1 ) if stock-D price at the end of period 1(P,p) is equal to $55 ? (3 pts) C. What should be stock D price by the end of period 1(P1) if the value-weighted index (marketcapitalization weighted index) rate of retum for the first period (from t=0 to t=1 ) is equal to 10% ? (5pts) D. Assume that stock-D price at the end of period 1(P,b) is equal to $30. If now (at t=0 ), you invest $5,000 in an index fund ABC that is tracking the performance of the value-weighted index formed from the above five stocks. Your Friend, Zach, invest $5,000 in an index fund XYZ that is tracking the performance of the price-weighted index formed from the above five stocks. How much money will you have more (or less) than Zach after one period (at t=1)2(5pts) Problem 2(16pts) We want to form an index using the five stocks presented in the below table: A. Calculate the rate of return on an equally weighted index for the first period (from t=0 to t=1 ) if stock-D price at the end of period 1(P1,D) is equal to $42?(3pts) B. Calculate the rate of return on an price weighted index for the first period (from t=0 to t=1 ) if stock-D price at the end of period 1(P,p) is equal to $55 ? (3 pts) C. What should be stock D price by the end of period 1(P1) if the value-weighted index (marketcapitalization weighted index) rate of retum for the first period (from t=0 to t=1 ) is equal to 10% ? (5pts) D. Assume that stock-D price at the end of period 1(P,b) is equal to $30. If now (at t=0 ), you invest $5,000 in an index fund ABC that is tracking the performance of the value-weighted index formed from the above five stocks. Your Friend, Zach, invest $5,000 in an index fund XYZ that is tracking the performance of the price-weighted index formed from the above five stocks. How much money will you have more (or less) than Zach after one period (at t=1)2(5pts)

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