The stock prices of five companies are $50, $60, $55, $58 and $63 then the initial value of price weighted index is ____________?
Correct answer: B. 57.2
- A. 60
- B. 57.2
- C. 55
- D. 63
Explanation
A price-weighted index is calculated by taking the arithmetic average of the stock prices: (50 + 60 + 55 + 58 + 63) ÷ 5 = 57.2. Therefore, option b is correct.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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