View the step-by-step solution to:

You are provided with the following information on four shares of stock. Assume that the base year is Dec 2000 and all splits take place on this...

This question was answered on Jan 12, 2013. View the Answer
1. Calculate the rate of return on a price weighted average of the four stocks for the period December 31, 2000 to December 31, 2001. Remember to adjust for changes in the divisor.
2. Calculate the rate of return on a market value weighted index of the four stocks for the period December 31, 2000 to December 31, 2001.
3. Calculate the rate of return on an equally weighted index of the four stocks for the period December 31, 2000 to December 31, 2001.
You are provided with the following information on four shares of stock. Assume that the base year is Dec 2000 and all splits take place on this date. That is after close of trading on December 31, 2000. Stock A and B have a 2 for 1 split at the end of trading on December 31, 2000. Use this information to answer the questions listed below. 31-Dec-00 31-Dec-00 31-Dec-01 31-Dec-01 31-Dec-00 Dec-01 Split Stock Price Shares Price Shares MV MV A $ 175.00 10000 $ 50.00 20000 $1,750,000 $1,000,000 2 B $ 50.00 4000 $ 35.00 8000 $200,000 $280,000 2 C $ 20.00 15000 $ 30.00 15000 $300,000 $450,000 1 D $ 140.00 20000 $ 130.00 20000 $2,800,000 $2,600,000 1 1. Calculate the rate of return on a price weighted average of the four stocks for the period December 31, 2000 to December 31, 2001. Remember to adjust for changes in the divisor. 2. Calculate the rate of return on a market value weighted index of the four stocks for the period December 31, 2000 to December 31, 2001. 3. Calculate the rate of return on an equally weighted index of the four stocks for the period December 31, 2000 to December 31, 2001.
Background image of page 1
Sign up to view the entire interaction

Top Answer

Here is the answer... View the full answer

8419270.xlsx

You are provided with the following information on four shares of stock. Assume that the base year is Dec 2000 and all splits take place on this date. That is after close of trading on December 31,...

This question was asked on Jan 11, 2013 and answered on Jan 12, 2013.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards