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23 December, 12:20

A benchmark index has three stocks priced at $23, $43, and $56. The number of outstanding shares for each is 350,000 shares, 405,000 shares, and 553,000 shares, respectively. If the market value weighted index was 970 yesterday and the prices changed to $23, $41, and $58 today, what is the new index value?

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  1. 23 December, 12:34
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    Old prices are $23, 43, 56

    New prices $23, 41, 58

    Shares 350,000; 405,000; 553,000

    Multiply Old prices by Shares:

    23*350,000 = 8,050,000

    43*405,000 = 17,415,000

    46*553,000 = 30,968,000

    In total = 56,433,000

    Multiply New prices by Shares:

    23*350,000 = 8,050,000

    41*405,000 = 16,605,000

    58*553,000 = 32,074,000

    In total = 56,729,000

    New index value = 970*56,729,000/56,433,000 = 975
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