Construct a price-weighted index for these three stocks

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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.

Reference no: EM132823592

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