Below is the information on the stock prices and shares outstanding of four stocks. Note...
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Finance
Below is the information on the stock prices and shares outstanding of four stocks. Note that the numbers are for illustration purposes and do not reflect the most updated market information on these stocks. Assume that you are investing a total of $453,600 in these four stocks to construct different types of indexes with them as the constituent stocks. Answer the following questions.
Constituent Stock | Price at t = 0 | Price at t = 1 | Shares Outstanding (Million) |
IBM | $120 | $150 | 9 |
Netflix | $350 | $406 | 4 |
Tesla | $200 | $176 | 2 |
Uber | $30 | $24 | 12 |
(a) To make your investment track a market-value-weighted index consisting of these four stocks, how much would you invest in each constituent stock? How many shares of each will you hold? Fill in the table below. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Constituent Stock | Dollar Amount Invested | Number of Shares Held |
IBM | $ 149,688 | 1247 shares |
Netflix | $ 195,048 | 557 shares |
Tesla | $ 54,432 | 272 shares |
Uber | $ 49,896 | 1663 shares |
The return of this MV-weighted index from t=0 to t=1 would be _____%. (Do not round intermediate calculations. Round your answer to 2 decimal places inside the percentage sign.)
(b) To make your investment track a price-weighted index consisting of these four stocks, how much would you invest in each constituent stock? Fill in the table below. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Constituent Stock | Dollar Amount Invested | Number of Shares Held |
IBM | $ | shares |
Netflix | $ | shares |
Tesla | $ | shares |
Uber | $ | shares |
The return of this price-weighted index from t=0 to t=1 would be ___%. (Do not round intermediate calculations. Round your answer to 2 decimal places inside the percentage sign.)
(c) To make your investment track an equally-weighted index consisting of these four stocks, how much would you invest in each constituent stock? Fill in the table below. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Constituent Stock | Dollar Amount Invested | Number of Shares Held |
IBM | $ | shares |
Netflix | $ | shares |
Tesla | $ | shares |
Uber | $ | shares |
The return of this equally-weighted index from t=0 to t=1 would be ___%. (Do not round intermediate calculations. Round your answer to 2 decimal places inside the percentage sign.)
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