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Basic Question 11 of 14

A price-weighted index in which a $50 stock increased by 10% and a $40 stock decreased by 12.5% would ______

A. decrease by 2.6 points.
B. stay the same.
C. increase by 1.5 points.
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User Contributed Comments 2

User Comment
Done 50 + 40 = 90

50(1.10)+ 40(1-.125) = 90

NO CHANGE
Bibhu another easier method is 50*10-40*12.5=0. So no change.
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Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

describe the choices and issues in index construction and management

compare the different weighting methods used in index construction

calculate and analyze the value and return of an index given its weighting method

describe rebalancing and reconstitution of an index

CFA® 2024 Level I Curriculum, Volume 3, Module 2.