A Price-Weighted Index Consists of Stocks A,B,and C Which Are

question 103

Multiple Choice

A price-weighted index consists of stocks A,B,and C which are priced at $38,$21,and $26 a share,respectively.The current index divisor is 2.7.What will the new index divisor be if stock B undergoes a 3-for-1 stock split?

• A) 2.1684
• B) 2.2553
• C) 2.5890
• D) 2.7000
• E) 3.1447

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