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givi [52]
3 years ago
9

Three stocks have share prices of $12, $75, and $30 with total market values of $400 million, $350 million and $150 million resp

ectively. If you were to construct a price-weighted index of the three stocks what would be the index value?A. 300B. 39C. 43D. 30
Mathematics
1 answer:
IrinaVladis [17]3 years ago
6 0

Answer:

B. 39

Step-by-step explanation:

The total market share values of the stocks does not influence on the price-weighted index, as the index is simply obtained by the sum of all share prices divided by the number of different stocks. The price-weighted index of the three stocks  is:

I=\frac{\$12+\$75+\$30}{3}\\I=\$39

The answer is alternative B. 39.

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