Notes: P0 is the stock price at time 0; Q0 is the shares outstanding at...
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Notes: P0 is the stock price at time 0; Q0 is the shares outstanding at time 0. Q1 is the shares outstanding at time 1. Rtn1 is the return between time 0 and time 1, which is defined as: rtn1=(P1-P0)/P0, whereas P1 is the stock price at time 1. For stock dividend, 50% means that if you have 10 shares at time 0, after the stock dividend, you are given another 5 shares (you hold 15 shares). For stock split, 3 for 1 means that if you have 1 shares at time 0, then after the stock dividend, you hold 3 shares. Assume that at time 0 index X is 200 points.
What is the equally weighted index return?
a.2.50%
b.5.00%
c.4.50%
D.600%
Table 1: Component stocks of Index X Stocks PO Q0 Rtn1 Stock dividend (see notes) No A 40 10 Stock split (see notes) No No No 3 for 1 B 30 15% -10% 5% 20 No 10 50% 90 60 D 20 10% No
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Notes: P0 is the stock price at time 0; Q0 is the shares outstanding at time 0. Q1 is the shares outstanding at time 1. Rtn1 is the return between time 0 and time 1, which is defined as: rtn1=(P1-P0)/P0, whereas P1 is the stock price at time 1. For stock dividend, 50% means that if you have 10 shares at time 0, after the stock dividend, you are given another 5 shares (you hold 15 shares). For stock split, 3 for 1 means that if you have 1 shares at time 0, then after the stock dividend, you hold 3 shares. Assume that at time 0 index X is 200 points.