Question

Suppose there is a simple index of three stocks, stock ABC, stock XYZ, and
stock QRS. Stock ABC opens on day 1 with 4000 shares at $3.15 per share.
Stock XYZ opens on day 1 with 5000 shares at $4.30 per share. Stock QRS
opens on day 1 with 6000 shares at $4.60 per share. The price of stock ABC
on day 8 begins at $3.50. The price of stock XYZ on day 8 begins at $3.90.
Stock QRS opens on day 8 with a price of $4.50 per share. Assume that each
stock has the same number of shares that it opened with on day 1. What is
the rate of change of this simple index over 1 week?
O A. 1.9%
O B. 2.0%
O C. -1.9%
O D. -2.0%

Answer 1

Answer: C -1.9

Step-by-step explanation:

Answer 2

The rate of change of this simple index over 1 week given the change in the stock prices is -1.9%.

What is the rate of change?

The rate of change is the difference in the total value of the simple index.

Total value of the simple index at day 1 = (4000 x $3.15) + (5000 x $4.30) + (6000 x $4.60) = $61,700

Total value of the simple index at day 8 = (4000 x $3.50) + (5000 x $3.90) + (6000 x $4.50) = $60,500

Rate of change = (60,500 / 61700) - 1 = -1.9%

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