Asked by Nicole Hoskins on May 09, 2024
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The Hydro Index is a price weighted stock index based on the 5 largest boat manufacturers in the nation. The stock prices for the five stocks are $10, $20, $80, $50 and $40. The price of the last stock was just split 2 for 1 and the stock price was halved from $40 to $20. What is the new divisor for a price weighted index?
A) 5.00
B) 4.85
C) 4.50
D) 4.75
Price Weighted Stock Index
An index in the stock market where the impact of each company’s stock on the index is directly proportional to its share price.
Stock Prices
The cost of purchasing a share of a company's stock, determined by supply and demand in the market.
Divisor
A number that divides into another number, typically referred to in the context of indices calculation in finance.
- Comprehend the various categories of stock indices and the methods used for their computations.
Verified Answer
AB
Learning Objectives
- Comprehend the various categories of stock indices and the methods used for their computations.