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Calculations for value of index

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Please help with the following problem.

Create your own index given the following data:

Number
of shares Closing Prices (per share)
Companies outstanding Day T Day T+1
1 2,000 $30.00 $35.00
2 6,000 55.00 50.00
3 3,000 22.50 25.00
4 4,000 40.00 42.50

Assume that a stock value weighted index consisted of the four issues above. What are the values of the index for Day T and for Day T+1 and what is the change?

Please notice that it is the "value weighted index". Please show steps. Thanks!

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Solution Summary

This solution helps indicate the values of index for various days and discusses the change. Step by step calculations are provided.

Solution Preview

A value weighted index is calculated using the market capitalization of the stocks. Take the sum of all market capitalization and divide by some arbitrary ...

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