40．If one of the common stocks in a price-weighted series splits three-for-one, the:

Select exactly 1 answers from the following:
A. value of the series will increase.
B. value of the series will decrease.
C. divisor for the series is adjusted upward to reflect the split.
D. divisor for the series is adjusted downward to reflect the split.
答案和详解如下！
Feedback: Correct answer: D

Investment Analysis and Portfolio Management, 7th edition, Frank K. Reilly and Keith C. Brown (Dryden, 2003), pp. 151?53

2006 Modular Level I, Vol. III, pp. 280-282

Study Session 12-53-a

distinguish among the composition and characteristics of the three predominant weighting schemes used in constructing stock market series, discuss the source and direction of bias exhibited by each of the three predominant weighting schemes, and compute a price-weighted, a market-weighted, and an unweighted index series for three stocks

A price-weighted series is an arithmetic average of current prices. If a stock split occurs, the divisor is adjusted downward so that the index value will be the same before and after the split.

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d