Assume at These Prices the Value-Weighted Index Constructed with the Three

question 32

Multiple Choice

Assume at these prices the value-weighted index constructed with the three stocks is 490.What would the index be if stock B is split 2 for 1 and stock C 4 for 1?

• A)265
• B)430
• C)355
• D)490
• E)1000

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Definitions:

Operating Profit

Earnings of a business before interest and taxes are deducted.

Rate of Mark-up

A pricing strategy calculation, expressed as a percentage, indicating how much higher a product's selling price is compared to its cost to produce or purchase.

Overhead Expenses

Costs not directly tied to the creation of a product or service but necessary for running a business, such as rent and utilities.

Volume Discount

A price reduction applied to a purchase based on the quantity of items bought, encouraging larger orders.