You decide to create your own stock index using five stocks. You also decide that the index should be price-weighted.

Using the data in the table below, calculate the initial value of your index. Show your calculations.

stock	price
J	$20
K	$50
Q	$100
W	$17
X	$88

b. Shortly after you form your index, Stock Q has a 1 for 4 stock split and you decide to replace Stock K with Stock Z. The new price information is contained in the table below. What is the new divisor for your index? Show your calculations.

Stock	Price
J	$20
Z	$36
Q	$25
W	$17
X	$88

a.Would your index have been useful for indicating the direction of the market if you had not recalculated the divisor in part b? Explain.