Homework SourseYou are given the following information concerning two stock
You are given the following information concerning two stocks that make up an index. What is the percentage value-weighted return for the index?
(Round your answer to 2 decimal places. Omit the \"%\" sign in your response.)
| Price per Share | |||
| Shares Outstanding | Beginning of Year | End of Year | |
| Kirk, Inc. | 31,000 | $44 | $40 |
| Picard Co. | 21,000 | 84 | 95 |
Solution
Percentage value-weighted return for the index
Beginning value = [($44 × 31,000) + ($84 × 21,000)] / 2 = $1564000
Ending value = [($40 × 31,000) + ($95 × 21,000)] / 2 = $1617500
Return = (Ending Value - Beginning value) / Beginning Value
Return = ($1617500 – $1564000) / $1564000 = 3.42%
