Assume the following information concerning two stocks that make up an index. Wh

Question

Assume the following information concerning two stocks that make up an index. What is the price-weighted return for the index? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Assume the following information concerning two stocks that make up an index. What is the price-weighted return for the index? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

Price Weighted Return for the index = Average of end of the year – Average at the beginning of the year/Average at the beginning of the year

= 92-86.5/86.5

= 5.5/86.5 = 6.36%

Shares Outstanding Beginning of Year End of Year   Kirk, Inc. 38000 62 67   Picard Co. 27500 111 117 Total 173 Total 184 Average 86.5 Average 92

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