The market consists of the following stocks their prices


The market consists of the following stocks. Their prices and number of shares are as follows:

Stock    Price     Number of Shares Outstanding

A           $10                100,000

B            20                 10,000

C            30                200,000

D            40                 50,000

a. The price of Stock C doubles to $60, what is the percentage increase in the market if a S&P 500 type of measure of the market is used?

b. Repeat question (a) but use a Value Line type of measure of the market (i.e., a geometric average) to determine the percentage increase.

c. Suppose the price of stock B doubled instead of stock C. How would the market have fared using the aggregate measures employed in (a) and (b)? Why are your answers different?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: The market consists of the following stocks their prices
Reference No:- TGS01088487

Expected delivery within 24 Hours