Consider the following price information on three stocks on two dates with corresponding number of shares outstanding: Stock Number of shares Price…
BBS Fundamentals of Investment · 2079 · Solved Question with Answer
Consider the following price information on three stocks on two dates with corresponding number of shares outstanding:
| Stock | Number of shares | Price | |
| Dec. 31, 2018 | Dec. 31, 2019 | ||
| A | 2,000 | Rs. 300 | Rs. 700 |
| B | 8,000 | 300 | 380 |
| C | 8,000 | 200 | 260 |
a. Construct a price-weighted index for these three stocks, and also compute the percentage change in the index the period from 2018 to 219.
b. Construct a market value weighted index for these three stocks and also compute the percentage change in the index for the period from 2018 to 2019.
c. Construct an equally-weighted index. What is the percentage change in wealth for this equally-weighted portfolio?
d. Briefly discuss the difference in the results for the three stock indexes.