Price-weighted index over the one-month period

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Reference no: EM131981458

1. Sue owns 2000 shares of the 20 million outstanding common shares of ABC Corp. ABC stockholders have preemptive rights. Now, ABC decides to sell 2 million new common shares through a rights offering. How many rights will Sue receive?

a. 200

b. 0.20

c. 0.10

d. 20

2. Suppose we employ a "price-weighted" methodology to construct and track a two-stock index based on Stocks X and Y. Stock X has an initial price of $10 and there are 10 million shares outstanding. Stock Y has an initial price of $20 and there are 40 million shares outstanding. One month later, Stock Xs price is $12 and Stock Ys price is still $20. The shares outstanding remain the same. What is the percentage change in our price-weighted index over the one-month period?

a. 0

b. 20.00%

c. 6.67%

d. 2.22%

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Reference no: EM131981458

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