A benchmark market value index is comprised of three stocks. Yesterday the three
ID: 2636930 • Letter: A
Question
A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $14, $24, and $50. The number of outstanding shares for each is 740,000 shares, 640,000 shares, and 340,000 shares, respectively. If the stock prices changed to $18, $22, and $52 today respectively, what is the 1-day rate of return on the index?
A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $14, $24, and $50. The number of outstanding shares for each is 740,000 shares, 640,000 shares, and 340,000 shares, respectively. If the stock prices changed to $18, $22, and $52 today respectively, what is the 1-day rate of return on the index?
8.78% 6.53% 3.93% 5.52%Explanation / Answer
5.52%
A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $14, $24, and $50. The number of outstanding shares for each is 740,000 shares, 640,000 shares, and 340,000 shares, respectively. If the stock prices changed to $18, $22, and $52 today respectively, what is the 1-day rate of return on the index?
Value of index on yesterday = 740000*14 + 640000*24 + 340000*50 = $42720000
Value of index on today = 740000*18 + 640000*22 + 340000*52 = $45080000
1 day return = ( 45080000 - 42720000) / 42720000 = 5.52 %
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