Consider the Following Three Stocks The Value-Weighted Index Constructed with the Three Stocks Using a \text

question 42

Multiple Choice

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 value-weighted index constructed with the three stocks using a divisor of 100 is

• A) 1.2.
• B) 1200.
• C) 490.
• D) 4900.
• E) 49.

---

Definitions:

Utility Function

A mathematical representation in economics that shows the relationship between individual preferences and the consumption of goods and services.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product for which every seller offers a similar product.

Entry Restrictions

Refers to barriers that limit the ability of new competitors to enter and compete in an industry or market.

Revenue Function

A financial formula used to calculate the total revenue generated by selling a particular quantity of goods or services.