Information iption ctions d Test This test has a time limit of 2 hours and 5 min
ID: 2596762 • Letter: I
Question
Information iption ctions d Test This test has a time limit of 2 hours and 5 minutes.This test will save and submit automatically when the time expire Warnings appear when half the time, 5 minutes, 1 minute, and 30 seconds remain ple Attempts Not allowed. This test can only be taken once e Completion Once started, this test must be completed in one sitting. Do not leave the test before clicking Save and Submit emaining Time: 2 hours, 01 minute, 17 seconds uestion Completion Status: Moving to another question will save this response tion 27 Using the following table, construct the price-weighted index of the three (3) stocks: (when appropriate, you may use a divisor of 100) Return 10% 12% 14% Stock Share Price Beta 150,000 $ 30 1.05 100,000 S 35 1.15 Moving to another question will save this response Several add-ons are ready for use. Display E221iExplanation / Answer
A price-weighted index is an index in which the member companies are weighted in proportion to their price per share, rather than by number of shares outstanding, market capitalization or other factors.
A price-weighted index is simply the sum of the members' stock prices divided by the number of members. Thus, in our example, the price weighted index is: $20 + $30 + $35 = $85 / 3 = 28.33.