Question

9. A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $12, $20, and $60. The number of outstanding shares for each is 600,000 shares, 500,000 shares, and 200,000 shares, respectively. If the stock prices changed to $16, $18, and $62 today respectively, what is the one day rate of return on the index?

Answer 1

6.16

Step-by-step explanation:

Index return= [($16 × 600000 + $18 × 500000 + $62 × 200000) ÷

($12 × 600000 + $20 × 500000 + $60 × 200000)] -1

= 6.16

Therefore, the one rate of return index is 6.16