Question

31-Dec-03 Price Stock 150.00 $50.00 Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. Caloulate the geometric mean return from 2003-2004 for an unwelighted index. Hint: You can account for W and X's stock spit in the HPR equation.) O-1568 O.1925 2791 -0625 6.25 points QUESTION 15 Use the following information to answer the next two questions. Suppose that you create a price weighted index consisting of the following three stocks: Price 1/2/2019 Prie 112018 Stock 47 200 75 Suppose that stock B underwent a 3:2 split immediately after close on 1/1/2018. Find the percentage change in a price-weighted index. Round intermediate steps and your final answer to four decimals. 0-4527 O-2617 00379

Answer 1

Question 14:

For a 2-to 1 Split, the stock price of W and X would have halved.

So, price of W at the end of 31-Dec-03 is 75/2 = $37.5

Similarly, the price of X at the end of 31-Dec-03 is 150/2 = $75

Geometric average return =((1+(50-37.5)/37.5)*(1+(65-75)/75)*(1+(35-25)/25)*(1+(50-40)/40))^(1/4)-1

Geometric average return = 0.1925 (Option b)

Note: We have answered one Multiple choice question. Only one multiple choice question will be answered at a time. Please post the other question separately for experts to answer