Assume the value-weighted index level was 300.45 at the beginning of the year. W
ID: 2638026 • Letter: A
Question
Assume the value-weighted index level was 300.45 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
You are given the following information concerning two stocks that make up an index.Assume the value-weighted index level was 300.45 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Explanation / Answer
begining value = share price of kirk at begining * no of shares of kink + share price of Picard at begining * no of shares of Picard
= 40000 * 38 + 29000 * 73
= 3,637,000
ending value = share price of kirk at ending * no of shares of ending + share price of Picard at ending * no of shares of ending
= 42 * 40000 + 29000 * 81
= 4,029,000
rate of return = 4,029,000 - 3,637,000 /3,637,000 = 10.778%
index level at end of year = 300.45 * (1+ 10.778%) = 332.83 ..........ans
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