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

Shares   Price Weighted Index Price Weighted Index Beginning Beginning End End a b a*b c a*c Kirk Inc 33000 $45.00 $1,485,000.00 $50.00 $1,650,000.00 Picard Co 31500 $75.00 $2,362,500.00 $81.00 $2,551,500.00 Total $3,847,500.00 $4,201,500.00 a. Initial Index Value = $3,847,500 b. Ending Index Value = $4,201,500 Price Weighted Index Return = (4201500 - 3847500) / 3847500 = 354000 / 3847500 = 0.0920078 = 9.20%

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