1. You are given the following information regarding prices for a sample of stocks.
| Stock |
Number of Shares
|
T
|
T +1
|
|
A
|
1,000,000
|
60
|
80
|
|
B
|
10,000,000
|
20
|
35
|
|
C
|
30,000,000
|
18
|
25
|
a. Construct a price-weighted index for these three stocks, and compute the percentage change in the index for the period from T to T + 1.
b. Construct a value-weighted index for these three stocks, and compute the percentage change in the index for the period from T to T + 1.
c. Briefly discuss the difference in the results for the two indexes.