40
QuizMultiple Choice

Investments — Test

Question 40 • 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 + $⁢140
B
($⁢60 + $⁢100 + $⁢140) ⋅ 100
C
($⁢60 + $⁢100 + $⁢140) ⋅ 3
D
$⁢60 + $⁢100 + $⁢1403

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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