a. Calculate the initial value of the index if a price-weighting scheme is used. Indes value b. What is the rate of return on this Index for the year ending December 31, 20197 For the year ending December 31, 20207 (A negative value should be Indicated by a minus sign. Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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- The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Price Shares(millions) 1/1/19 1/1/20 1/1/21 Douglas McDonnell 210 $ 94 $ 97 $ 111 Dynamics General 450 36 31 45 International Rockwell 350 65 54 68 a. Calculate the initial value of the index if a value-weighting scheme is used. (Round your answer to 2 decimal places.) b. What is the rate of return on this index for the year ending December 31, 2019? For the year ending December 31, 2020? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)You are given the following information regarding four stocks in a portfolio: Company # of Shares Price ($) 2020 Price ($) 2021 ELITE 40,000 3.11 2.99 FTNA 5,000 30.37 34.10 GWEST 55,000 2.05 1.80 TTECH 20,000 5.55 4.60 Assuming 2020 is the base year with an index value of 500: i. Compute a price-weighted index of these four stocks for 2021. ii. Compute a value-weighted index of these four stocks for 2021. What is the percentage change in the value of the index from 2020 to 2021? iii. Compute the un-weighted index of these four stocks for 2019. What is the percentage change in the value of the index from 2020 to 2021Demonstrate the impact of different values on a market value weighted stock index with a hypothetical example considering three stocks (stock A, B and C), no. of shares and price for base year 2020 and for the year 2021 with two different cases Case A and Case B ( base year index value as 100)
- Based on the following stock price and shares outstanding information, compute the beginning and ending values for a price-weighted index and a market-value-weighted index. December 31, 2018 December 31, 2019 Price Shares Shares Outstanding Price Outstanding Stock K 20 100,000 32 100,000 Stock M 80 2,000 45 4,000* Stock R 40 25,000 42 25,000*Stock split two-for-one during the year. Base index 100a. Compute the percentage change in the value of each index and the new during the year b.…Below are the annual returns of the stock A, B, C and D and the market portfolio for the period 2018-2022. Find the expected return and standard deviation of the stock A, B, C, D and the market Year Prob. Asset A Asset B Asset C Asset D Market 2018 0,20 11,00 9,00 12,00 15,00 14,00 2019 0,25 13,00 11,00 15,00 13,00 12,00 2020 0,10 9,00 8,00 11,00 10,00 9,00 2021 0,20 12,00 12,00 11,00 13,00 12,00 2022 0,25 15,00 10,00 9,00 12,00 13,00You are given the following information regarding prices for stocks of the followingfirms: PRICE Stock Number of Shares T T+ 1 ScotBank Ltd. 1,000,000 60 80 Jetvan Ltd 10,000,000 20 35 PriceLife Ltd. 30,000,000 18 25 i. Construct a price-weighted index for these three stocks and compute the percentagechange in the series for the period from T to T +1. ii. Construct a market-value-weighted index for these three stocks and compute thepercentage change in the series for the period from T to T +1. iii. Based on your answer above, which of these indexes BEST illustrate the movementon the stock market.
- The following stock price information has been collected for stock XYZ: \table[[End of year,Closing price],[2023,$127On January 4, 2019, the DJIA opened at 22,686.22. The divisor at that time was .1474807199 . What would the new index level be if all stocks on the DJIA increased by$1.00per share on the next day? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Index levelYou are given the following information regarding prices for a sample of stocks. PRICE PER SHARE Stock Number of Shares Jan December Honda 20 000 170 200 Nissan 40 000 130 155 Toyota 90 000 138 145 i.) Construct a price-weighted index for these three stocks for January and December ii.) Construct a value weighted index for the securities above for January and December iii) Construct an equal-weighted index by assuming $1,000 is invested in each stock. What is the percentage change in wealth for this portfolio?
- A price-weighted index consists of Stocks A, B, and C which are priced at $50, $35, and $15 a share, respectively. The current index divisor is 3. What will the new index divisor be if Stock A undergoes a 5-for-1 stock split? (show your steps)Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following November 2019 expiration options on a single share, assuming that the stock price on the expiration date is $143. (Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)A prospective investor obtained the following information on XY stock: Date Stock Prices ($) Dividends Paid 4/01/2020 61.25 2/02/2020 52.38 0.75 4/05/2020 64.88 0.75 30/06/2020 70.50 0.75 25/10/2020 75.75 0.75 30/12/2020 71.00 Calculate the time-weighted rate of return using both the Linking and Index methods.