What is return on equal weighted index of these three stocks

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Reference no: EM13721864

Assume there are only three stocks in the market: A, B, and C. At time 0, P(A) = $10, P(B) = $20, and P(C) = $10. At time 1, P(A) = $15, P(B) = $30, P(C) = $5. The number of shares outstanding is 1 million for A, 2 million for B, and 2 million for C.

a. What are the individual stock returns for A, B, and C from time 0 to time 1?

b. What is the return on a price weighted index of these three stocks?

c. What is the return on a price weighted index of these three stocks?

d. What is the return on an equal weighted index of these three stocks?

e. Why the three indexes give different returns?

Reference no: EM13721864

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