Assume the value-weighted index level was 200.48 at the beginning of the year. W

Question

Assume the value-weighted index level was 200.48 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

You are given the following information concerning two stocks that make up an index.

Assume the value-weighted index level was 200.48 at the beginning of the year. What is the index level at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explanation / Answer

Solution - Here we need to find the comparative change in position in the new capital and according the index will be changed as % of change in the capital from beginning of the year to the end of the year.

Index New / Index Old = Capital New / Capital Old

x / 200.48 = 4307000 / 3950000

x = 4307000 / 3950000 x 200.48

x = 218.599

Shares Outstanding Beginning of Year Price per Share End of Year Price per Share   Kirk, Inc. 33,000 46 51   Picard Co. 32,000 76 82 A Capital ( Kirk Inc) ( Shares Outstanding x Price ) 1518000 1683000 B Capital ( Picard Co) ( Shares Outstanding x Price ) 2432000 2624000 Total Capital ( A+B) 3950000 4307000 Index Level 200.48 ??

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