Consider the following information for securities of three companies: Year Market Price (Rs.) Number of shares outstanding Alpha Beta Delta Alpha…
BBS Fundamentals of Investment · 2082 · Solved Question with Answer
Consider the following information for securities of three companies:
| Year | Market Price (Rs.) | Number of shares outstanding | ||||
| Alpha | Beta | Delta | Alpha | Beta | Delta | |
| 2022 | 15 | 40 | 35 | 1000 | 3000 | 2000 |
| 2023 | 9 | 45 | 30 | 3000 | 3000 | 2000 |
| 2024 | 10 | 50 | 40 | 3000 | 3000 | 3000 |
There has been 2-for-1 stock split of Alpha stock at the end of year 2022.
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a. Determine price weighted index for each year using 2022 as the base year.
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b. Determine value weighted index for each year using base value of 100.
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c. What is the return for stock for 2023 and 2024 based on the price weighted and value weighted index?