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Author Question: Consider a value-weighted market index that includes the two companies shown in the table. You form ... (Read 30 times)

Pineapplelove6

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on: Apr 25, 2021

Question 1

Consider a value-weighted market index that includes the two companies shown in the table. What is the percentage change in the index from Day 1 to Day 2?

​Company 1Company 1Company 2Company 2
DayPrice# of SharesPrice# of Shares
1$7.00400$10.001,500
2$7.24400$10.531,500

◦ 4.00%
◦ 4.25%
◦ 4.50%
◦ 4.75%
◦ 5.00%

Question 2

Consider a value-weighted market index that includes the two companies shown in the table. You form a portfolio to mimic the index on Day 1. The mimic portfolio is designed to earn the same return as the index. What is the portfolio weight for Company 1?

​Company 1Company 1Company 2Company 2
DayPrice# of SharesPrice# of Shares
1$6.62200$10.00750
2$7.24200$10.54750

◦ 15%
◦ 16%
◦ 17%
◦ 18%
◦ 19%
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by Pineapplelove6 on Apr 25, 2021

kaykay69

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Pineapplelove6

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

kthug

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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