Consider the following three stocks: $\begin{array}{lll}
\text { Stock } & \text { Price Number of shares}& \text { outstanding } \
\text { Stock A } & \$ 40 & 200 \
\text { Stock B } & \$ 70 & 500 \
\text { Stock C } & \$ 10 & 600
\end{array}$ The price-weighted index constructed with the three stocks is
A) 30.
B) 40.
C) 50.
D) 60.
E) 70.

Question

Consider the following three stocks: $\begin{array}{lll}
\text { Stock } & \text { Price Number of shares}&  \text { outstanding } \
\text { Stock A } & \$ 40 & 200 \
\text { Stock B } & \$ 70 & 500 \
\text { Stock C } & \$ 10 & 600
\end{array}$ The price-weighted index constructed with the three stocks is
A) 30.
B) 40.
C) 50.
D) 60.
E) 70.

Quizplus · Accepted Answer

The price-weighted index is calculated by taking the sum of the stock prices and dividing by the number of stocks. For these three stocks, the calculation is $(\$40 + \$70 + \$10) / 3 = \$120 / 3 = \$40$.

Consider the Following Three Stocks The Price-Weighted Index Constructed with the Three Stocks Is A)

Consider the Following Three Stocks The Price-Weighted Index Constructed with the Three Stocks Is
A)