Equity Investments Q75
75Peter gathers the following information for a market-capitalization- weighted
index comprised of securities ABC, DEF and GHI:
| Security | Beginning of Period Price | End of Period Price | Dividends per share | Share Outstanding |
| ABC | 1,500 | 1,700 | 10 | 6,000 |
| DEF | 2,500 | 1,500 | 15 | 8,500 |
| GHI | 500 | 600 | 10 | 10,000 |
The total return of the index is closest to:
- Option :
- Explanation : The total return of the market-capitalization-weighted index is calculated below:
Security Beginning of PeriodValue End of Period Value TotalDividend TotalReturn % ABC 9,000,000 10,200,000 60,000 14 DEF 21,250,000 12,750,000 127,500 -39.4 GHI 5,000,000 6,000,000 100,000 22 Total 35,250,000 28,950,000 287,500 -17.06
