Assume that there are only four stocks trading in a stock change

Finance Dec 27, 2020

Assume that there are only four stocks trading in a stock change. The current prices and total number of currently quoted shares for each stock is given below

Stock Price Quoted Shares

A 30 180 000

B 65 120 000

C 90 50 000

D 20 250 000

The base year chosen by the exchange in that country is 2005 during which the average price and average quoted shares were as follows

Stock Price Quoted Shares

A 8 60 000

B 11 80 000

C 24 40 000

D 5 100 000

Given that the exchange uses a multiplier of 1000 in that country; find the current value of the index by using value weighted approach

Expert Solution

=(30*180000+65*120000+90*50000+20*250000)/(8*60000+11*80000+24*40000+5*100000)*1000
=8049.64539

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