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 Xs 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
0 0
Add a comment Improve this question Transcribed image text
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

Add a comment
Know the answer?
Add Answer to:
31-Dec-03 Price Stock 150.00 $50.00 Stocks W and X had 2 for 1 splits after the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT