An index consists of the following securities: ||Stock ||Shares Outstanding|| Yesterday's...


An index consists of the following securities:

Stock Shares Outstanding Yesterday's Price Today's Price
A 1,000$32$38

- Suppose the index is price-weighted. Current index divisor is 2.7. If after today, Stock B experience a 3-for-1 split. What is the new divisor?

- If the index is value-weighted, what is the index level? Use yesterday as a base. Assume yesterday's index level is 1,000.

- If the index is equally weighted. You have $1000 in the index yesterday. How should you rebalance your positions today?


The index is a collection of identical securities which indicates the growth on the decline in the combined prices of those securities. It is a hypothetical portfolio that indicates the growth or decline in the industry and in the economy.

Answer and Explanation: 1

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Value given:

Current price (Stock A) = $38

Current price (Stock B) = $23

Current price (Stock C) = $55

Yesterday price (Stock A) = $32


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What is a Database Index? - Definition & Tutorial


Chapter 6 / Lesson 10

Take a look into the definition of a database index, a comparison of spreadsheets and database indexes, a full-text search engine comparison, a tutorial of database index types, and some categories of database indexes.

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