Question: Solve clearly Question 1 (30 marks) Use the following information for parts A to B. The Dow Jones Industrial Average is an example of price-weighted

Solve clearly

Question 1 (30 marks) Use the following information for parts A to B. The Dow Jones Industrial Average is an example of price-weighted index. Suppose the following index is also a price-weighted index. The index is composed of 5 stocks (A, B, C. D and E). The stock prices of the 5 stocks on day 1 and day 2 are shown below. Suppose the index level on day 1 is 16,227. Stock Price per share $ Number of free-float shares (million) Day 1 Day 2 A 73.96 $75.97 84 B 45.54 47.71 218 C 13.33 14.98 74 D 31.94 33.42 173 E 43.79 45.53 116 A. Calculate the index level of the index on day 2 using price-weighted method. (6 marks) B. Calculate the percentage of rise or fall of the index from day I to day 2. (4 marks)

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