Based on the following stock price and shares outstanding information, compute the beginningand ending values for a price-weighted index and a market-value-weighted index.December 31, 2018December 31, 2019SharesStock KStock MStock RPrice SharesOutstandingPrice Outstanding20100,000,000802,000,00032 100,000,00045 4,000,000*4025,000,0004225,000,000*Stock split two-for-one during the year. Index at the beginning was 100a. Compute the percentage change in the value of each index during the year and the new indexb. Explain the difference in results between the two indexes.c. Compute the percentage change for an un-weighted (equal weight $ 1000 is invested in eachstock )index and discuss why these results differ from those of the other indexes[40 marks]

In the above answer, the price-weighted index declined by 15% because it is heavily influenced by…

Answered: Based on the following stock price and…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Based on the following stock price and shares outstanding information, compute the beginning and ending values for a price-weighted index and a market-value-weighted index. December 31, 2018 December 31, 2019 Price Shares Shares Outstanding Price Outstanding Stock K 20 100,000 32 100,000 Stock M 80 2,000 45 4,000* Stock R 40 25,000 42 25,000*Stock split two-for-one during the year. Base index 100a. Compute the percentage change in the value of each index and the new during the year b.…
Based on the following stock price and shares outstanding information, compute the beginning and ending values for a price-weighted index and a market-value-weighted index. December 31, 2018 December 31, 2019 Price Shares Shares Outstanding Price Outstanding Stock K 20 100,000,000 32 100,000,000 Stock M 80 2,000,000 45 4,000,000* Stock R 40 25,000,000 42 25,000,000*Stock split two-for-one during the year.a. Compute the percentage change in the value of each index during the year.b. Explain the difference in…
You are given the following information regarding four stocks in a portfolio: Company # of Shares Price ($) 2020 Price ($) 2021 ELITE 40,000 3.11 2.99 FTNA 5,000 30.37 34.10 GWEST 55,000 2.05 1.80 TTECH 20,000 5.55 4.60 Assuming 2020 is the base year with an index value of 500: i. Compute a price-weighted index of these four stocks for 2021. ii. Compute a value-weighted index of these four stocks for 2021. What is the percentage change in the value of the index from 2020 to 2021? iii. Compute the un-weighted index of these four stocks for 2019. What is the percentage change in the value of the index from 2020 to 2021
You are given the following information regarding prices for stocks of the followingfirms: PRICE Stock Number of Shares T T+ 1 ScotBank Ltd. 1,000,000 60 80 Jetvan Ltd 10,000,000 20 35 PriceLife Ltd. 30,000,000 18 25 i. Construct a price-weighted index for these three stocks and compute the percentagechange in the series for the period from T to T +1. ii. Construct a market-value-weighted index for these three stocks and compute thepercentage change in the series for the period from T to T +1. iii. Based on your answer above, which of these indexes BEST illustrate the movementon the stock market.
The following stock price information has been collected for stock XYZ: \table[[End of year,Closing price],[2023,$127
Demonstrate the impact of different values on a market value weighted stock index with a hypothetical example considering three stocks (stock A, B and C), no. of shares and price for base year 2020 and for the year 2021 with two different cases Case A and Case B ( base year index value as 100)
An index consists of the following securities and has an index divisor of 3.0. What is the price-weighted index return? Index Stock Shares Outstanding 1,000 Beginning Share Price $26 Ending Share Price 4,000 $32 $28 $30 3,000 $19 $ 22 DEF 9.33% 10.35% 11.54% 12.33% 13.00%
An index consists of the following securities. What is the value-weighted index return? Value-weighted Stock Shares Outstanding Beginning Share Price Ending Share Price L 4,000 $ 18 $ 26 M 3,000 $ 35 $ 41 Multiple Choice 22.03% 22.85% 25.25% 28.25% 30.00%
A prospective investor obtained the following information on XY stock: Date Stock Prices ($) Dividends Paid 4/01/2020 61.25 2/02/2020 52.38 0.75 4/05/2020 64.88 0.75 30/06/2020 70.50 0.75 25/10/2020 75.75 0.75 30/12/2020 71.00 Calculate the time-weighted rate of return using both the Linking and Index methods.
Assume the following information concerning two stocks that make up an index. What is the price-weighted return for the index? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Kirk, Incorporated Picard Company Return Shares Outstanding 39,000 28,000 2.20 % Price per Share Beginning of Year $72 End 113 of Year $ 77 122
Data as given are shown below: Year Bartman Reynolds Market Index Stock Price Dividend Stock Price Dividend 2020 $17.250 $1.150 $48.750 $3.000 11,663.98 2019 14.750 1.06 52.300 2.90 8,785.70 2018 16.500 1.000 48.750 2.750 8,679.98 2017 10.750 0.950 57.250 2.500 6,434.03 2016 11.375 0.900 60.000 2.250 5,602.28 2015 7.625 0.850 55.750 2.000 4,705.97 Use the data given to calculate annual returns for Bartman and Reynolds, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the…
Directions: Compute the returns, average of returns and standard deviation of the following stocks and the PSEI. 1. 2. AGI SM Year Stock Return x x (x--x)² Year Stock Return x x (x-x)² Price Price 30/1/2014 27.100 30/1/2014 704.500 28/2/2014 30.000 28/2/2014 694.000 31/3/2014 28.500 31/3/2014 705.000 30/4/2014 31.150 30/4/2014 725.000 30/5/2014 29.650 30/5/2014 786.000 30/6/2014 29.100 30/6/2014 816.000 31/7/2014 26.350 31/7/2014 797.000 29/8/2014 24.600 29/8/2014 772.000 30/9/2014 26.000 30/9/2014 803.500 31/10/2014 25.300 31/10/2014 783.500 28/11/2014 24.800 28/11/2014 804.500 29/12/2014 22.550 29/12/2014 815.000 PSEI Year Stock Return x X (x-X)? 30/6/2014 6,844.31 Price 31/7/2014 6,864.82 30/1/2014 6,041.19 29/8/2014 7,050.89 3. 28/2/2014 6,424.99 30/9/2014 7,283.07 31/10/2014 7,215.73 31/3/2014 6,428.71 28/11/2014 7,294.38 30/4/2014 6,707.91 29/12/2014 7,230.57 30/5/2014 6,647.65

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