Equity Investments Q76
0. John gathers the following data for a value-weighted index::
| Beginning of period | End of period | |||
| Security | Price | $ Shares | Price$ | Shares |
| A | 10 | 100 | 15 | 100 |
| B | 40 | 150 | 38 | 150 |
| B | 40 | 150 | 38 | 150 |
The return on the value-weighted index over the period is closest to: :
- Option : B
- Explanation : It is the percentage change in the market value over the period: Market value at beginning period: (10 * 100) + (40 * 150) + (16 * 200) = 10,200. Market value at end of period: (15 * 100) + (38 * 150) + (20 * 200) = 11,200 Percentage change is (11,200 / 10,200) - 1 = 0.09804 or 9.8 percent with rounding.
