Equity Investments Q77
| Security | Beginning of period price $ | End of period price $ | TotalDividends $ |
| A | 20 | 15 | 2 |
| B | 40 | 48 | 4 |
| C | 60 | 60 | 9 |
What is the price return of the index?
- Option : B
- Explanation : The price return of the index equals the weighted average of price returns of the individual securities. Return of A: −25 percent = (15 − 20)/20; Return of B: 20 percent = (48 − 40)/40; Return of C: 0 percent = (60 − 60)/60. The price return index assigns equal weights to each asset; therefore, the price return is 1/3 ∗ (−25% + 20% + 0%) = −1.7%.
