Question: There are two stocks, A and B, which make up a particular market cap weighted index. Given below are the closing prices and number of

There are two stocks, A and B, which make up a particular market cap weighted index. Given below are the closing prices and number of shares outstanding for each stock for both yesterday and today. Stock B split 3-for-1 today before the market opened. After the split, what is the value of the index today before the market opens if the index contains stocks A and B? The index closed yesterday at 1,500 (before stock B split 3-for-1).

There are two stocks, A and B, which make up a particular

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Closing price of stock A Shares outstanding for stock A Closing price of stock B Shares outstanding for stock B Index value Yesterday S60 1,000 S120 400 1,500 Today S62 1,000 $43 1,200

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