1. You are given the following information regarding prices for stocks of the following firms:
Price
Stock Number of shares T T+1
Beximco 1,000,000 60 80
BATBC 10,000,000 20 35
Bank Asia 30,000,000 18 25
a. Construct a price-weighted index for these three stocks, and compute the percentag...
Chapter 2
1. You are given the following information regarding prices for stocks of the
following firms:
Price
Stock Number of shares T T+1
Beximco 1,000,000 60 80
BATBC 10,000,000 20 35
Bank Asia 30,000,000 18 25
a. Construct a price-weighted index for these three stocks, and compute the
percentage change in the series for the period from T to T + 1. Assume a starting
index value of 10,000 points.
b. Construct a value-weighted index for these three stocks, and compute the
percentage change in the series for the period from T to T + 1. Assume a starting
index value of 10,000 points.
c. Briefly discuss the difference in the results for the two stock indexes.
2. Based on the following stock price and shares outstanding information, compute
the beginning and ending values for a price-weighted index and a market-value-
weighted index. Assume that the value-weighted index had a base value of 100
points.
December 31, 2016 December 31, 2017
Stock Price Shares Price Shares
outstanding outstanding
Beximco 20 100,000,000 32 100,000,000
BATBC 80 2,000,000 45 4,000,000
Bank Asia 40 25,000,000 42 25,000,000
a. Compute the percentage change in the value of each index.
b. Explain the difference in results between the two indexes.
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