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

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Definitions:

Twin Studies

Research designs that compare monozygotic (identical) and dizygotic (fraternal) twins to assess genetic and environmental influences on physical and psychological traits.

Trait

A distinguishing quality or characteristic, typically one belonging to a person.

Behavior

The observable actions or responses of humans or animals in response to external or internal stimuli.

Genes

Units of heredity made up of DNA that act as instructions to make molecules called proteins, influencing the development, functioning, and reproduction of organisms.