Question

Suppose there is a simple index of three stocks, stock X, stock Y, and stock Z. Stock X opens the day with 5000 shares at $4.10 per share. Stock Y opens the day with 2000 shares at $4.50 per share. Stock Z opens the day with 4000 shares at $3.60 per share. The simple index rises 3.4% over the course of the day. What is the value of the index at the end of the day? Round your answer the nearest hundred. A. $45,100 B. $43,900 C. $45,400 D. $44,800

Answer 1

45,400

Explanation:

just took test AP3

Answer 2

Step 1:

Calculate the total value of stock X

`\begin{gathered} =5000*\text{ \$}4.10 \\ =\text{ \$}20,500 \end{gathered}`

Step 2:

Calculate the total value for Stock Y

`\begin{gathered} =2000*4.5 \\ =\text{ \$}9000 \end{gathered}`

Step 3:

Calculate the total value for stock Z

`\begin{gathered} =4000*\text{ \$}3.60 \\ =\text{ \$}14,400 \end{gathered}`

Step 4:

Calculate the total value of the shares but without the increase yet

`\begin{gathered} 20,500+9000+14,400 \\ =\text{ \$}43,900 \end{gathered}`

Step 5:

Calculate the increase in the simple index

`\begin{gathered} =(3.4)/(100)*43900 \\ =\text{ \$}1,492.60 \end{gathered}`

Step 6:

Add the increase in the simple index to the total value of the shares

`\begin{gathered} 43,900+1,492.60 \\ =\text{ \$}45,392.60 \\ \approx\text{ \$}45,400 \end{gathered}`

Hence,

The final answer is

`\Rightarrow\text{\$}45,400`

OPTION C is the right answer