Consider the following three stocks: Assume at these prices that the value-weighted index constructed with the three stocks is 490.What would the index be if stock B is split 2 for 1 and stock C 4 for 1
A)265
B)430
C)355
D)490
E)1000

Question

Consider the following three stocks:  Assume at these prices that the value-weighted index constructed with the three stocks is 490.What would the index be if stock B is split 2 for 1 and stock C 4 for 1
A)265 
B)430 
C)355 
D)490 
E)1000

Quizplus · Accepted Answer

Value-weighted indexes are not affected by stock splits.

Consider the Following Three Stocks: Assume at These Prices