Assume the Following Five Companies Are Used in Computing an Index

question 29

Essay

Assume the following five companies are used in computing an index (there have been no stock splits during this time). $\begin{array}{lrrr}&&\text { Base Period }&\text { Current Period }\\&\text { Shares} &\text { January 1, 1977 }&\text { December 31, 2004}\\\underline{\text {Company}}&\underline{\text { Outstanding }} & \underline{\text { Market Price }} & \underline{\text { Market Price }}\\\text { A } & 2,000 & \$ 2.00 & \$ 14.00 \\\text { B } & 6,000 & 6.00 & 18.00 \\\text { C } & 5,000 & 9.00 & 23.00 \\\text { D } & 8,000 & 10.00 & 5.00 \\\text { E } & 1,000 & 13.00 & 40.00\end{array}$ (a) If the index is price-weighted, what will be the value of the index on Dec. 31, 2004?
(b) Using the same data from the above table, determine the index value if the index is calculated on a value-weighted basis.

Comprehend the concept of function composition and its application.

Understand the concept of transformations applied to exponential functions.

Understand the differences between primary and secondary markets.

Comprehend the role and functions of investment banks in primary markets.

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Definitions:

Societal Culture

The shared customs, beliefs, values, norms, and social behavior that characterize the members of a society or community.

Business Culture

Business culture encompasses the values, beliefs, behaviors, and practices that define the environment within a company and how it conducts its business.

Laws Enacted

Legislation that has been officially approved and implemented by a governing body.

Moral Philosophy

The branch of philosophy concerned with principles of right and wrong behavior, as well as the goodness or badness of human character.