You are given the following information. 31-Dec-16 31-Dec-16 31-Dec-17 31-Dec-17
ID: 2807975 • Letter: Y
Question
You are given the following information.
31-Dec-16
31-Dec-16
31-Dec-17
31-Dec-17
Stock
Price
Shares
Price
Shares
W
$ 50.00
10000
$ 25.00
20000
X
$ 40.00
5000
$ 25.00
10000
Y
$ 20.00
20000
$ 30.00
20000
Z
$ 30.00
15000
$ 40.00
15000
Stocks W and X had 2 for 1 splits on December 31, 2016. The information in the table for 2016 is pre-split.
3.4 Calculate the price weighted series for Dec 31, 2016, prior to the splits.
3.5 Calculate the price weighted series for Dec 31, 2016, after the splits.
3.6 Calculate the price weighted series for Dec 31, 2017.
31-Dec-16
31-Dec-16
31-Dec-17
31-Dec-17
Stock
Price
Shares
Price
Shares
W
$ 50.00
10000
$ 25.00
20000
X
$ 40.00
5000
$ 25.00
10000
Y
$ 20.00
20000
$ 30.00
20000
Z
$ 30.00
15000
$ 40.00
15000
Explanation / Answer
3.4 Price weighted series as on Dec 31,2016 prior to splits = (50+40+20+30)/4 = 35
3.5 After split, W's price becomes 25 and X's price becomes 20.
Index divisor is calculated as = (50/2+40/2+20+30)/x = 35
(25+20+20+30)/35 = X
X = 2.7143
Price weighted series = (25+20+20+30)/2.7143 = 35
Price weighted series as on Dec 31,2016 after the splits = 35
3.6 Price weighted series as on Dec 31,2017 = (25+25+30+40)/2.7143= 44.21
Price weighted series as on Dec 31,2017 = 44.21
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