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Construct a price-weighted index for the four stocks

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Reference no: EM132826170

Question - The following information is available for stocks in four companies as given below:

Company No. of Shares Outstanding Closing Price DAY T (Per Share) DAY T + 1

Fortis 8000 70 75

CIBC 6000 55 50

JFK 1000 60 65

Amazon 7500 80 84.5

Required -

A. Construct a price-weighted index for the four stocks. What are the values for DAY T and DAY T+1? What is the percentage change?

B. Construct a market-value-weighted index for the four stocks. Assume that DAY T is the base period and the base value is 50. What is the new index value for DAY T+1 and how has the index changed?

C. If an investor has $10,000 to invest, compute an unweighted price indicator series. What is the percentage change for this portfolio?

Reference no: EM132826170

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