AFM273 Final: AFM-271-2009-Midterm-2-Prof.-James-Thompson
26 Feb 2019
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Instructions: answer all questions in the space provided, show all of your calculations, the examination has 12 pages (not including this cover page). Do not write any part of your answers on this page. If you nd it easier to consult this page by detaching it from your exam, please do so. You are not expected to hand in the formula sheet. Question 1: 27 marks. (a) (8 marks) you are given the following data for two stocks, a and b: Price per number of shares price per number of shares. . 25 1,000,000 + . 50 7,000,000 1 = 2. 0% ! 1 = 5. 17% (iii) the value-weighted index will be affected more by stock stock b since it has a higher market cap in both periods. Since b"s return is negative, this drags down the value-weighted index below that of the price weighted index which is not affected by this issue.
