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Compare and contrast the following:
A. Dow Jones Industrial Average and S&P 500 as stock market indexes
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- What information do you need to calculate the weighted average common shares outstanding?Compare and contrast the following: A. Primary and secondary financial markets. B. Dow Jones Industrial Average and S&P 500 as stock market indexesMark the followingstatement True or False. 1.The Dow Jones Industrial Average Index is a price-weighted index. 2.S&P 500 indexisa market-value-weightedindex.
- According to the explanation of the attached picture in my textbook is that " price-weighted index (e.g., Dow Jones) is computed by summing the prices of the individual stocks, then dividing by a divisor to determine the base index value. The divisor, such as 100, relates the starting value and is adjusted as stocks split or composition of the index is changed" please illustrate the calculation of stock market indexs and market value-weighted index correlatively with the table in picture and the explanation below the table to make me understand why divisor is 100, what's the core concept in calculating both price-weighted index and market value-weighted index in the tableThe securities market is tracked by a wide variety of indexes, each of which focuses on a different group of stocks. The following table lists stock quotes from four of the most widely cited indexes: the Dow Jones Industrial Average (DJIA), the Nasdaq-100, the S&P 500, and the NYSE Index, where in interpreting these numbers, it is most important to consider . Index Quotes DJIA Nasdaq-100 S&P 500 NYSE Index 28,658.92 (+391.35) 8,918.84 (+173.66) 3,128.78 (+42.73) 13,300.06 (+158.19) True or False: Based on the numbers not in parentheses in the previous table, you can tell that NYSE Index stocks were performing roughly one-half as well as DJIA stocks at the time this data was collected. True False Complete the following table by indicating the name of the index being described, as well as the number of stocks each index tracks. Description Index Size Primarily stocks from the NYSE, but a few Nasdaq stocks as…The Standard and Poor's 500 is an index that include 500 of the best US companies and is based on the price of the stocks of said companies. Select one: True False
- All parts are under one question therefore can be answered in full per policy. 1. Stock prices and stand-alone risk The S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companies, it is a market value-weighted index. This means that each company’s performance is reflected in the index, weighted by the ratio of the company’s value to the total value of all the companies. A. Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher? Forecast earnings for S&P 500 companies are expected to fall in the future. Forecast earnings for S&P 500 companies are expected to rise in the future. B. You invest $100,000 in only one stock. To which kind of risk will you primarily be exposed? Stand-alone risk Portfolio…What is the difference between stock price indexes that are simple averages of prices and those that are capitalization-weighted? Give examples of each.A price-weighted index such as the DJIA is a geometric mean of current stock prices. a. True b. False
- You 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.1.You are given the following information regarding prices for a sample of stocks. PRICE STOCK NUMBER OF SHARES T T +1 A 1,000,000 60 80 B 10,000,000 20 35 C 30,000,000 18 25 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.Using the data in the chart, calculate the first-period rates of return on the following indexes of the three stocks: A market-value-weighted index. An equally weighted index. stocks P0 Q0 P1 Q1 P2 Q2 A 90 100 95 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 (Pt represents price at time t, and Qt represents shares outstanding at time t.)
