Reference no: EM132823592
Question - You are given the following information regarding prices for stocks of the following firms:
PRICE
Stock Number of Shares T T+1
ScotBank Ltd. 1,000,000 60 80
Jetvan Ltd 10,000,000 20 35
PriceLife Ltd. 30,000,000 18 25
i. Construct a price-weighted index for these three stocks and compute the percentage change in the series for the period from T to T + 1.
ii. Construct a market-value-weighted index for these THREE (3) stocks and compute the percentage change in the series for the period from T to T + 1.
iii. Based on your answer above, which of these indexes BEST illustrates the movement on the stock market. Give reasons for your answer.