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

question 88

Multiple Choice

A price-weighted index consists of stocks A, B, and C which are priced at $55, $38, and $17 a share, respectively. The current index divisor is 2.75. What will the new index advisor be if stock A undergoes a 5-for-1 stock split?

• A) 0.40
• B) 0.65
• C) 1.00
• D) 1.65
• E) 1.85

---

Definitions:

Base Pay

The initial salary provided to an employee, not including bonus, benefits, or other compensation.

Performance-Based Pay

A compensation strategy where an employee's pay is directly linked to their performance and achievements in the workplace.

Strategic Objectives

Long-term goals that help to guide an organization towards its envisioned future state and success.

Organizational Mission

The fundamental purpose or goal that guides a company or institution, often stated in a mission statement.