An Index Consists of the Following Securities and Has an Index

question 40

Multiple Choice

An index consists of the following securities and has an index divisor of 3.0. What is the price-weighted index return?
$$\begin{array} { c c c c } \text { Stock } & \text { Shares Outstanding } & \text { Begin Erice } & \text { End Price } \\\text { A } & 4,500 & \$ 20 & \$ 25 \\\text { B } & 7,000 & \$ 15 & \$ 12 \\\mathbf { C } & 3,000 & \$ 28 & \$ 35\end{array}$$

• A)11.11%
• B)12.50%
• C)14.29%
• D)15.32%
• E)16.32%

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Definitions:

Disposable Income

Economic latitude for households in spending and saving after the removal of income taxes.

APS

Automatic positioning system; however, in an economic context, it often refers to the Average Propensity to Save, indicating the proportion of income that is saved rather than spent.

Saving

The portion of income not spent on immediate consumption but set aside for future use, typically in bank accounts, investments, or other forms of financial savings.

Disposable Income

The spending and saving financial capacity of households after deductions for income taxes.