FIN 533 Homework
Due Thursday, September 9, 2009
Answer the question below based on the information given in the following table:
P0
S0
P1
S1
P2
S2
Stock A
20
200
22
200
22
200
Stock B
12
400
15
400
15
400
Stock C
90
100
82
100
41
200
P is price and S is shares outstanding
1. What is the rate of return on a price-weighted index of the three stocks for the first
period (time 0 to time 1)?
2. What would the divisor of the price-weighted index be for the second period (time 1
to time 2)?
3. What is the return on a market value-weighted index for the first period?
4. What is the rate of return on an equally-weighted index for the first period?
