Author Question: Consider a value-weighted market index that includes the two companies shown in the table. You form ... (Read 61 times)

mcmcdaniel

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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 1 Company 1 Company 2 Company 2
  Day Price  of Shares Price  of Shares
  1 6.62 200 10.00 750
  2 7.24 200 10.54 750
 
  A) 15
  B) 16
  C) 17
  D) 18
  E) 19

Question 2

You deposited (1,000 ) in a savings account that pays 8 percent interest, compounded quarterly, planning to use it to finish your last year in college.
 
  Eighteen months later, you decide to go to the Roshy Mountains to become a ski instructor rather than continue in school, so you close out your account. How much money will you receive? (Round to the nearest whole dollar)
  A) 1,171
  B) 1,126
  C) 1,082
  D) 1,163
  E) 1,008



jennafosdick

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Answer to Question 1

A

Answer to Question 2

B



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