1. You created an index of four stocks that have share prices of $120, $290, $375, and $440 and market capitalizations of $180 million, $400 million, $350 million, and %150 million, respectively.
2. 
   
3. Required

(a) what is the index value of a price-weighted index using the four stocks?

(b) if the stock with a price of $440 is replaced by a stock with a price of $220, what is the new index denominator?

Answer rating: 100% (QA)

a To calculate the index value of a priceweighted index we sum up the share ... View the full answer