Stocks XX, YY, and ZZ, initially priced at $35, $65, and $72, respectively, comprise a price-weighted index with a base value of 100. One year later the stocks above were valued at $40, $69, and $87, respectively. What was the value of the index at the end of year one?

Question

Quizplus · Accepted Answer

A price-weighted index is calculated by adding the prices of the stocks and dividing by the number of stocks. Initially, the sum was $35 + $65 + $72 = $172. After one year, the sum is $40 + $69 + $87 = $196. The index value is then (196/172) * 100 = 114.

Stocks XX, YY, and ZZ, Initially Priced at $35, $65