Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 56: Security Market Indices
LOS e: Calculate and interpret the value and return of an index on the basis of its weighting method
An index was recently begun with the following two stocks:
- Company A – 50 shares valued at $2 each.
- Company B – 10 shares valued at $10 each.
Given that the value-weighted index was originally set at 100 and Company A's stock is currently selling for $4 per share while Company B’s stock is still at $10 per share, what is the current value of the price-weighted index and the market-cap-weighted index?
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Price-weighted |
Market-cap-weighted |
Price weight = [(4) + (10)] / 2 = 7
Market-cap weight = [(4)(50) + (10)(10)] / [(2)(50) + (10)(10)](100) = 150
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发表于 2011-3-29 16:23
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