The Market Consists of the Following Stocks

question 39

Essay

The market consists of the following stocks. Their prices and number of shares are as follows:
    Stock         Price   Number of Shares Outstanding
      A            $10              100,000
      B             20               10,000
      C             30              200,000
      D             40               50,000

a. The price of Stock C doubles to $60. What is the percentage increase in the market if a S&P 500 type of measure of the market (value-weighted average)is used?

b. Repeat question (a)but use a Value Line type of measure of the market (i.e., a geometric average)to determine the percentage increase.

c. Suppose the price of stock B doubled instead of stock C. How would the market have fared using the aggregate measures employed in (a)and (b)? Why are your answers different?

Identify factors leading to changes in aggregate supply and demand, including policy decisions and environmental changes.

Understand the definition and causes of stagflation.

Assess the impact of fiscal and monetary policies on aggregate supply and aggregate demand.

Recognize the factors that shift the long-run aggregate supply curve and their implications for the economy.

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Definitions:

De-emphasize

To make something appear less important or less significant.

Negative Information

Data or facts that highlight disadvantages, drawbacks, or unfavorable aspects of a subject or situation.

Goodwill

An intangible asset that represents the value of a company's brand, customer relations, employee morale, and other factors that improve the company's reputation.

Recipient's First Name

The given name of an individual who is the intended receiver of a message or item.