# Investment Analysis Questions

- You are given the following information regarding prices for a sample of stocks.

PRICE | ||||||

Stock | Number of Shares | T | T + 1 | |||

A | 3,900,000 | $74 | $90 | |||

B | 14,000,000 | 28 | 43 | |||

C | 28,000,000 | 18 | 29 |

- Construct a
*price-weighted*index for these three stocks, and compute the percentage change in the index for the period from*T*to*T*+ 1. Do not round intermediate calculations. Round your answer to two decimal places.

%

- Construct a
*value-weighted*index for these three stocks, and compute the percentage change in the index for the period from*T*to*T*+ 1. Do not round intermediate calculations. Round your answer to two decimal places.

%

- You are given the following information regarding prices for a sample of stocks.

PRICE | ||||||

Stock | Number of Shares | T | T + 1 | |||

A | 3,300,000 | $66 | $78 | |||

B | 12,000,000 | 26 | 38 | |||

C | 26,000,000 | 21 | 34 |

- Construct an equal-weighted index by assuming $1,000 is invested in each stock. What is the percentage change in wealth for this portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

%

- Compute the percentage of price change for each of the stocks. Do not round intermediate calculations. Round your answers to two decimal places.

Stock A: %

Stock B: %

Stock C: %

Compute the arithmetic mean of these percentage changes. Do not round intermediate calculations. Round your answer to two decimal places.

%

- Compute the geometric mean of the percentage changes in Part b. Do not round intermediate calculations. Round your answer to two decimal places.

%

- Calculate a Dow Jones Industrial Average for days 1 through 5. Do not round intermediate calculations. Round your answers to three decimal places.

PRICE SHARES Company A B C A B C Day 1 $15 $23 $53 500 400 210 Day 2 10 21 55 500 400 210 Day 3 15 46 50 500 200^{a} 210 Day 4 14 47 23 500 200 420^{b} Day 5 10 46 25 500 200 420 ^{a}Split at close of day 2.^{b}Split at close of day 3. Day 1: Day 2: Day 3: Day 4: Day 5: Calculate a Standard& Poor’s Index for days 1 through 5 using a beginning index value of 10. Do not round intermediate calculations. Round your answers to three decimal places. | |||||||||||||

PRICE | SHARES | ||||||||||||

Company | A | B | C | A | B | C | |||||||

Day 1 | $14 | $23 | $53 | 550 | 370 | 270 | |||||||

Day 2 | 10 | 25 | 56 | 550 | 370 | 270 | |||||||

Day 3 | 14 | 46 | 58 | 550 | 185^{a} | 270 | |||||||

Day 4 | 13 | 48 | 31 | 550 | 185 | 540^{b} | |||||||

Day 5 | 12 | 45 | 29 | 550 | 185 | 540 | |||||||

^{a}Split at close of day 2.^{b}Split at close of day 3. |

Day 1:

Day 2:

Day 3:

Day 4:

Day 5:

- Consider the following stock price and shares outstanding information.

DECEMBER 31, Year 1 | DECEMBER 31, Year 2 | |||||||

Price | SharesOutstanding | Price | SharesOutstanding | |||||

Stock K | $21 | 105,000,000 | $29 | 105,000,000 | ||||

Stock M | 70 | 2,000,000 | 48 | 4,000,000^{a} | ||||

Stock R | 43 | 20,000,000 | 48 | 20,000,000 | ||||

^{a}Stock split two-for-one during the year. | ||||||||

^{ } |

- Compute the beginning and ending values for a price-weighted index and a market-value-weighted index. Assume a base value of 100 and Year 1 as the base period. Do not round intermediate calculations. Round your answers to two decimal places.

PWI_{Year 1}:

PWI_{Year 2}:

VWI_{Year 1}:

VWI_{Year 2}:

- Compute the percentage change in the value of each index during the year. Do not round intermediate calculations. Round your answers to two decimal places.

Percentage change in PWI: %

Percentage change in VWI: %

- Compute the percentage change for an unweighted index assuming $1,000 is invested in each stock. Do not round intermediate calculations. Round your answer to two decimal places.

%

- Given the monthly returns that follow, find the R
, alpha, and beta of the portfolio. Compute the average return differential with and without sign. Do not round intermediate calculations. Round your answers to two decimal places.^{2}

Month | Portfolio Return | S&P 500 Return | ||

January | 5.5 | % | 5.8 | % |

February | -2.5 | -3.2 | ||

March | -1.7 | -1.3 | ||

April | 2.9 | 2.0 | ||

May | 0.7 | 0.4 | ||

June | -0.5 | -0.1 | ||

July | 0.1 | 0.3 | ||

August | 1.1 | 1.3 | ||

September | -0.8 | -0.6 | ||

October | -3.0 | -3.4 | ||

November | 2.3 | 1.6 | ||

December | 0.6 | 0.4 |

R* ^{2}*:

Alpha: %

Beta:

Average return difference (with signs): %

Average return difference (without signs) %

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