Question

A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $30, $38, and $90. The number of outstanding shares for each is 710 thousands shares, 610 thousands shares, and 310 thousands shares, respectively. If the stock prices changed to $34, $36, and $92 today respectively, what is the one-day rate of return on the index

Answer 1

The one-day rate of return on the index is 3.43%

Step-by-step explanation:

Given that the shares were priced at;

$30 for 710,000 shares

$38 for 610,000 shares

$90 for 310,000 shares

Changes in prices of shares

$34-$30=4

$36-$38= -2

$92-$90=2

Return=change in price of shares/initial price of shares *100

The return will be;

4/30*100 =13.33

-2/38*100= -5.26

2/90*100 = 2.22

Total = 13.33+2.22 - 5.26 =10.29

10.29/3 =3.43