a.Explain the differences between a value weighted stock index and a price weighted stock index.
b.Why is value weighted often preferred?
c. Give an example of a value weighted index.
d. Give an example of a price weighted index
a. A stock index consists of selective stocks based on it's market cap and value of the firm. These again differ with the weights. Those are value weighted and price weighted. Dow jones comes under price weighted while NASDAQ comes under value weighted. Difference in between these two are that the price weighted considers the share price of the stock and value weighted considers the market capitalization.
b. Value weighted is preferred because companies with large cap get's more significance than the companies with the smaller cap.
c. Value weighted index examples are NYSE, SENSEX.
d. Price weighted index examples are Nikkei 225.
a.Explain the differences between a value weighted stock index and a price weighted stock index. b.Why is value weighted...
The Hydro Index is a price weighted stock index based on the 5 largest boat manufacturers in the nation. The stock prices for the five stocks are $10, $20, $80, $50 and $40. Assume that the divisor is 5. What is the value of a price weighted index? Please Show Workings 60 40 50 45
In addition to price-weighted and value-weighted indexes, an equally weighted index is one in which the index value is computed from the average rate of return of the stocks comprising the index. Equally weighted indexes are frequently used by financial researchers to measure portfolio performance. The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Shares (millions)...
Which of the following stock price indexes is a price--weighted index? a) Dow Jones Industrial Average b) Standard & Poor's 500 Index c) Nasdaq d) Wilshire 5000
A value-weighted index consisting of stocks A, B, and C was created yesterday. When the index was created, stocks A,B, and C traded for $80, $45, and $125, respectively. The number of shares outstanding for A,B, and C, was 500, 900, and 600 when the index was formed. Today, stocks A, B, and C trade for $65, $50, and $145, respectively. Find the return on the index from yesterday to today Round intermediate steps and your final answer to four...
A market value weighted index has three stocks in it, call them A, B, and C, priced at 54, 60, and 27 per share. Each firm has 339, 376 and 421 thousand shares outstanding, respectively. The value of the index at close of trading day is 834. At this time, the index decides to remove stock C from the index, and in its place to insert stock D. Stock D has a closing price of $85 per share, and 196...
You want to form a value–weighted technology stock index using Apple, Google, and Intel. Apple’s adjusted closing price for 2019 is $293.65 and for 2018 is $155.41; Google’s adjusted closing price for 2019 is $1,337.02 and for 2018 is $1,035.61; Intel’s adjusted closing price for 2019 is $59.85 and for 2018 is $45.79. The additional information that you gathered is their market values at the end of 2018 or beginning of 2019; in billions of dollars, Apple's market value is $740.93 B,...
3. Following is the stock price for three stocks for time 0 and time 1. Time 0 Time 1 #Shares 50 100 80 Stock A splits 2-for-1 between time 0 and 1 Stock Stock Price Price # Shares $55 $100 $60 A $30 $115 $40 A 100 B 100 80 C C What is the value of a price weighted index including all three stocks at time 0? (3 points) a) b) What is the new divisor for a price-weighted...
You want to form a price–weighted technology stock index using Apple, Google, and Netflix. Apple’s adjusted closing price for 2019 is $293.65 and for 2018 is $155.41; Google’s adjusted closing price for 2019 is $1,337.02 and for 2018 is $1,035.61; Netflix’s adjusted closing price for 2019 is $323.57 and for 2018 is $267.66. What is the annual return for your price–weighted technology stock index for 2019?
You want to form a price–weighted technology stock index using Apple, Google, and Microsoft. Apple’s adjusted closing price for 2018 is $157.74 and for 2017 is $166.73; Google’s adjusted closing price for 2018 is $1,035.61 and for 2017 is $1,046.40; Microsoft’s adjusted closing price for 2018 is $101.57 and for 2017 is $84.08. What is the annual return for your price–weighted technology stock index for 2018?
Which of the following is not a value-weighted series? A. NASDAQ Industrial Index B. Dow Jones Industrial Average C. Wilshire 5000 Equity Index D. American Stock Exchange Series E. NASDAQ Composite Index