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30 November, 16:55

A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $30, $38, and $90. The number of outstanding shares for each is 710 thousands shares, 610 thousands shares, and 310 thousands shares, respectively. If the stock prices changed to $34, $36, and $92 today respectively, what is the one-day rate of return on the index

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  1. 30 November, 17:02
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    The one-day rate of return on the index is 3.43%

    Explanation:

    Given that the shares were priced at;

    $30 for 710,000 shares

    $38 for 610,000 shares

    $90 for 310,000 shares

    Changes in prices of shares

    $34-$30=4

    $36-$38 = - 2

    $92-$90=2

    Return=change in price of shares/initial price of shares * 100

    The return will be;

    4/30*100 = 13.33

    -2/38*100 = - 5.26

    2/90*100 = 2.22

    Total = 13.33+2.22 - 5.26 = 10.29

    10.29/3 = 3.43
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