What is the percentage increase in the market

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The market consists of the following stocks. Their prices and number of shares are as follows: 

    Stock         Price   Number of Shares Outstanding 

      A            $10              100,000 

      B             20               10,000 

      C             30          200,000 

      D             40               50,000 

a. What is the aggregate market value if a S&P 500 type of measure of the market (value-weighted average) is used? 

b. The price of Stock C doubles to $60. What is the percentage increase in the market if a S&P 500 type of measure of the market (value-weighted average) is used? 

c. Repeat question (b) but use a Value Line type of measure of the market (i.e., a geometric average) to determine the percentage increase. 

d. Suppose the price of stock B doubled instead of stock C. How would the market have fared using the aggregate measures employed in (b) and (c)? Why are your answers different?

Reference no: EM132576488

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