An Index Consists of the Following Securities A)372%
B)5

question 15

Multiple Choice

An index consists of the following securities. What is the value-weighted index return?
$\begin{array}{cccc}\text { Stock } & \text { Shares Outstanding } & \text { Begin Price } & \text { End Price } \\\text { H } & 5,000 & \$ 18 & \$ 22 \\\text { I } & 7,500 & \$ 12 & \$ 11 \\\text { J } & 2,000 & \$ 32 & \$ 36\end{array}$

• A)3.72%
• B)5.09%
• C)6.61%
• D)7.07%
• E)8.40%

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Definitions:

Required Rate

The minimum expected return by investors to compensate for the risk of an investment, often used in capital budgeting.

Useful Life

The estimated period over which a fixed asset is expected to be usable by an organization, impacting its depreciation calculations.

Straight-Line

A method of calculating depreciation or amortization of an asset evenly across its useful life.

Discount Rate

The specific rate used in the context of discounted cash flow analysis to ascertain the present value of cash flows that are to be received in the future.