Question

Currently the S&P500 index is at 2,789.82. The current Base period is such that the denominator of the index is 2,500. The Numerator of the index goes up to 7,250,000 because of a merger of two companies and the introduction of a new company into the index. Calculate the new base period denominator of the index. Calculate the new base period denominator of the index.

Answer 1

Answer: 2598.7

Step-by-step explanation:

Numerator/denominator = 7250000/2500

= 2900

So from given numerator and denominator current value should be 2900

But it is 2789.82 so difference =2900-2789.82=110.18

Current S&p value = numerator/ denominator

New base period denominator = 7250000/2789.82

New base period denominator= 2598.7

Answer 2

Check the explanation

Step-by-step explanation:

Numerator/denominator = 7250000/2500

= 2900

So from given numerator and denominator current value should be 2900

But it is 2789.82 so difference =2900-2789.82=110.18

Current S&p value = numerator/ denominator

New base Denominator= 7250000/2789.82

New base denominator= 2598.7