23
QuizMultiple Choice

Investments — Test

Question 23 • Financial Math

In a stock market index, Company A has a stock price of $⁢60 , Company B has a stock price of $⁢100 , and Company C has a stock price of $⁢140 Which expression shows how to calculate the price-weighted stock index?

Answer
A
($⁢60 + $⁢100 + $⁢140) ⋅ 100
B
($⁢60 + $⁢100 + $⁢140) ⋅ 3
C
$⁢60 + $⁢100 + $⁢1403
D
$⁢60 + $⁢100 + $⁢140

Explanation

A price-weighted index is calculated by adding the stock prices and dividing by the number of stocks. Here that is ($60 + $100 + $140) ÷ 3. Choice C shows this expression, with the sum divided by 3.

AI-written and checked against the verified answer.

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