1) Suppose the market index uses a capitalization weighting method, what is the weight on...
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1) Suppose the market index uses a capitalization weighting method, what is the weight on Company A stock in the market index? (1 point)
2) Suppose the market index uses a price weighting method, what is the weight on Company A stock in the market index? (1 point)
3) Suppose that you are tracking the market index (using a market cap weighting method) and you have invested $9,000 in Company B. What is the amount that you have invested in Company D? (2 points)
Use the following information to answer the question(s) below. Suppose that all possible investment opportunities in the world are limited to the four stocks listed in the table below: Price Number of Shares per Outstanding Stock Share (Millions) Company A $15.60 25 Company B $13.00 45 Company C $29.25 10 Company D $26.25 26 1) Suppose the market index uses a capitalization weighting method, what is the weight on Company A stock in the market index? (1 point) 2) Suppose the market index uses a price weighting method, what is the weight on Company A stock in the market index? (1 point) 3) Suppose that you are tracking the market index (using a market cap weighting method) and you have invested 59,000 in Company B. What is the amount that you have invested in Company D? (2 points)
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