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    Price-weighted index and the return on the index

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    Stock Price # of Shares
    a b c a b c
    Day 1 13 24 50 500 700 250
    Day2 15.2 22.25 55 500* 700 250
    day3 7.4 25.3 54 1500 700 250**
    day4 7.4 26.7 11.1 1500 700 1250

    *3:1 Split on Stock A after close of Day 2
    **5:1 Split on Stock C after close of Day 3

    Calculate the price-weighted index and the return on the index for days 1,2, and 3

    See attached file for full problem description.

    © BrainMass Inc. brainmass.com March 4, 2021, 7:42 pm ad1c9bdddf
    https://brainmass.com/business/profitability-index/price-weighted-index-and-the-return-on-the-index-117939

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    Stock Price # of Shares
    a b c a b c
    Day 1 13 24 50 500 700 250
    Day2 15.2 22.25 55 500* 700 250
    day3 7.4 25.3 54 1500 700 250**
    day4 7.4 26.7 11.1 1500 700 1250

    *3:1 Split on Stock A after close of Day 2
    **5:1 Split on Stock C after close of Day 3

    calculate the price-weighted index and the return on the index for days 1,2, and 3

    A price-weighted average is calculated by adding up the prices of the index constituents and ...

    Solution Summary

    Calculates the price-weighted index and the return on the index

    $2.49

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