Consider the following three stocks: $$\begin{array} { l c c }
\text { Stock } & \text { Price } & \text { Number of shares outstanding } \
\hline \text { Stock A } & \$ 40 & 200 \
\text { Stock B } & \$ 70 & 500 \
\text { Stock C } & \$ 10 & 600
\end{array}$$
The price-weighted index constructed with the three stocks is
A) 30
B) 40
C) 50
D) 60
E) 70

Question

Consider the following three stocks: $$\begin{array} { l c c } 
\text { Stock } & \text { Price } & \text { Number of shares outstanding } \
\hline  \text { Stock A } & \$ 40 & 200 \
\text { Stock B } & \$ 70 & 500 \
\text { Stock C } & \$ 10 & 600
\end{array}$$
The price-weighted index constructed with the three stocks is
A) 30
B) 40
C) 50
D) 60
E) 70

Quizplus · Accepted Answer

A price-weighted index is calculated by adding the prices of the stocks and dividing by the number of stocks. (40 + 70 + 10) / 3 = 120 / 3 = 40.

Consider the Following Three Stocks The Price-Weighted Index Constructed with the Three Stocks Is A)

Consider the Following Three Stocks The Price-Weighted Index Constructed with the Three Stocks Is
A)