An Index Is Made Up of Stock X, Stock Y

question 40

Multiple Choice

An index is made up of Stock X, Stock Y, and Stock Z. The prices of the three stocks are $32, $97, and $53. If Stock Y undergoes a 2-for-1 stock split, what is the new index divisor?

• A) 2.38133
• B) 2.01364
• C) 2.65873
• D) 2.20055
• E) 2.43150

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Definitions:

Closed

Refers to an account, operation, or period that has been finalized and no longer available for transactions or adjustments.

Posting

The process of transferring the debits and credits from the journal entries to the accounts.

Debit

An entry recorded on the left side of an account ledger, signifying an increase in assets or expenses or a decrease in liabilities, equity, or income.

Unearned Revenue

The liability created by receiving revenue in advance.