a. Construct a price-weighted index for these three stocks, and compute the percentage change in the index for the period from T to T + 1.  b. Construct a value-weighted index for these three stocks, and compute the percentage change in the index for the period from T to T + 1.  c. Briefly discuss the difference in the results for the two indexes.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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a. Construct a price-weighted index for these three stocks, and compute the percentage
change in the index for the period from T to T + 1. 
b. Construct a value-weighted index for these three stocks, and compute the percentage
change in the index for the period from T to T + 1. 
c. Briefly discuss the difference in the results for the two indexes.

Stock
Number of Shares
PRICE
T
T+1
1,000,000
60
80
10,000,000
20
35
30,000,000
18
25
AB
Transcribed Image Text:Stock Number of Shares PRICE T T+1 1,000,000 60 80 10,000,000 20 35 30,000,000 18 25 AB
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