Ejercicios Indices PDF

GABRIEL BECERRIL
Security Market Indices

1. As time passes, the total return index will most likely be:
A. Greater in value than the price return index by a decreasing amount.
B. Lower in value than the price return index by an increasing amount.
C. Greater in value than the price return index by an increasing amount.
Use the following information to answer Questions 2 to 7:

An analyst gathered the following information regarding an equity market index which was created on
1 January 2009 and consists of the following 4 securities:
Price at 31 Dec
2009 ($)
Price at 31 Dec
2010 ($)
Dividend paid ($)
Weight in the
index
31
35
25%
42
48
35%
27
32
20%
22
24
20%
Securities
GABRIEL BECERRIL
Order No : 8634
Order Date :2012-12-19
SINALOA 106 DEPT 1001COL. ROMA NORTE
[email protected]
Assume that dividends are paid at the end of the year.

The following information is also available:
Price return in 2009 = 10.25%
Total return in 2009 = 15.75%
2. The price return on Security A in 2010 is closest to:
A. 19.35%
B. 16.13%
C. 12.90%
3. The total return on Security C in 2010 is closest to:

A. 18.52%
B. 29.63%
C. 22.22%
4. The price return on the index in 2010 is closest to:

A. 13.75%
B. 19.66%
C. 17.75%
Order No : 8634
GABRIEL BECERRIL
5. The total return on the index in 2010 is closest to:

A. 15.25%
B. 17.75%
C. 19.66%
6. Given that the index value at inception was 1,000, the values of the price return index at the
end of 2009 and 2010 are closest to:
2009
2010
1,137.50
1,293.91
1,102.50
1,254.09
1,102.50
1,137.50
C
GABRIEL BECERRIL
Order No : 8634
[email protected]
7. Given that the index value at inception was 1,000, the values of the total return index at the
end of 2009 and 2010 are closest to:
2009
2010
1,157.50
1,385.06
1,196.60
1,431.85
1,157.50
1,431.85
8. The first decision that an index provider must make when conducting an index is most likely:
A. Security selection
B. Allocation of weight to each security
C. Identification of the target market
Order No : 8634
GABRIEL BECERRIL
9. Which of the following statements regarding the construction of an index is least accurate?
A. It must consist of all the securities in the target market.
B. The target market may be based on asset class or the exchange on which the securities
are traded.
C. The number of securities in the index may be fixed or variable.
Use the following information relating to a price-weighted equity index to answer Questions 10
to 14:
Security
Shares in
index
Price at the end of

2009
Price at the end of

2010
Dividends per
share
46
53
0.2
55
51
0.4
36
42
0.1
B
GABRIEL BECERRIL
Order No : 8634
[email protected]
Assume that all dividend payments are made at the end of the year.
10. The weight of Security B in the index at 31 December 2010 is closest to:
A. 33.58%
B. 40.15%
C. 34.93%
11. The weight of Security C in the index at 31 December 2009 is closest to:
A. 28.77%
B. 26.28%
C. 36.30%
12. Given that the index divisor is set to 3, the value of the index at 31 December 2010 is closest
to:
A. 292
B. 97.33
C. 48.67
13. The price return on the index is closest to:

A. 7.08%
B. 6.57%
C. 7.80%
Order No : 8634
GABRIEL BECERRIL
14. The total return on the index is closest to:

A. 8.07%
B. 7.60%
C. 7.08%
Use the following information regarding equal-weighted equity index to answer Questions 15 to
19:
GABRIEL BECERRIL
Order No : 8634
Security
Price at the end of

2009
Price at the end of

2010
Dividends per
share
20
25
0.5
50
45
0.2
31.25
36
0.4
100
135
0.5
C
[email protected]
Note: The dollar value of the index at 31 December 2009 is $10,000 and using a divisor of 10, the
index level equals 1,000.
15. The number of shares of Security C in the index at 31 December 2009 is closest to:
A. 80
B. 50
C. 125
A. 18.55%
B. 25.00%
C. 19.35%
17. The value of the index at 31 December 2010 is closest to:

A. 11,630
B. 10,000
C. 1,163

A. 16.30%
B. 17.47%
C. 17.90%
Order No : 8634
GABRIEL BECERRIL

A. 17.47%
B. 18.57%
C. 17.90%
Use the following information relating to a market-capitalization-weighted equity index to

answer Questions 20 to 24:
Security
Shares
outstanding
Price at the end of

2009
Price at the end of

2010
Dividends per
share
4,000
30
36
0.85
12,000
25
21
2.15
7,000
40
47
1.12
B
GABRIEL BECERRIL
Order No : 8634
[email protected]
20. The weight of Security A in the index at 31 December 2010 is closest to:
A. 19.86%
B. 17.14%
C. 18.27%
21. The weight of Security C in the index at 31 December 2009 is closest to:
A. 45.38%
B. 40.00%
C. 42.86%
22. Given a divisor of 700, the value of the price-return index at 31 December 2010 is closest to:
A. 1,000
B. 1,125.21
C. 1,035.71
23. The price return on Security B is closest to:

A. 3.57%
B. -16%
C. 20%
Order No : 8634
GABRIEL BECERRIL

A. 8.86%
B. 3.57%
C. 7.50%
Use the following information relating to a float-adjusted-market-capitalization-weighted equity

index to answer Questions 25 to 30:
Security
Shares
outstanding
% of shares in
the market
float
Price at the end

of 2009
Price at the end

of 2010
Dividends per
share
20,000
41%
42
38
0.85
15,000
37%
54
51
2.15
20,000
53%
27
35
1.12
B
GABRIEL BECERRIL
Order No : 8634
[email protected]
25. The number of shares of Security C in the index at 31 December 2010 is closest to:
A. 10,600
B. 20,000
C. 8,200
26. The float-adjusted market capitalization of Security A at 31 December 2009 is closest to:
A. $311,600
B. $344,400
C. $286,200
A. 29.31%
B. 32.22%
C. 37.02%
28. Given that the index value at 31 December 2009 was 1,000, the value of the price-return
index at 31 December 2010 is closest to:
A. 1,038
B. 965.65
C. 1,124.17
Order No : 8634
GABRIEL BECERRIL

A. 3.80%
B. 5.11%
C. 4.28%

A. 5.11%
B. 6.22%
C. 7.11%
31. Consider the following statements:

GABRIEL BECERRIL
Order No : 8634
Statement 1: The price return of a market-capitalization-weighted equity index will be lower

than that of an equal-weighted equity index if large-cap stocks underperform.
[email protected]
Statement 2: The divisor in a price-weighted equity index typically equals the number of
shares of each constituent security in the index.
Which of the following is most likely?
A. Only Statement 1 is incorrect.
B. Only Statement 2 is incorrect.
C. Both statements are correct.
32. A market-capitalization-weighted equity index most likely:

A. Results in arbitrary weights for each security.
B. Leads to a lower ratio of book value to market value as compared to a fundamentallyweighted index.
C. Assigns a lower weight to a security whose price is relatively low.
33. A fundamental-weighted index based on the earnings yield most likely:

A. Follows a momentum trading strategy.
B. Assigns a higher weight to securities whose prices have risen.
C. Assigns a higher weight to securities with a higher earnings yield.
34. Which of the following indices least likely requires rebalancing?

A. Market-capitalization-weighted indices
B. Price-weighted indices
C. Equal-weighted indices
Order No : 8634

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GABRIEL BECERRIL

Security Market Indices

Use the following information to answer Questions 2 to 7:

Dividend paid ($)

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

Assume that dividends are paid at the end of the year.

3. The total return on Security C in 2010 is closest to:

4. The price return on the index in 2010 is closest to:

5. The total return on the index in 2010 is closest to:

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

Price at the end of

Price at the end of

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

13. The price return on the index is closest to:

14. The total return on the index is closest to:

Order Date :2012-12-19

Price at the end of

Price at the end of

17. The value of the index at 31 December 2010 is closest to:

18. The price return on the index is closest to:

19. The total return on the index is closest to:

Use the following information relating to a market-capitalization-weighted equity index to

Price at the end of

Price at the end of

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

23. The price return on Security B is closest to:

24. The total return on the index is closest to:

Use the following information relating to a float-adjusted-market-capitalization-weighted equity

Price at the end

Price at the end

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

29. The price return on the index is closest to:

30. The total return on the index is closest to:

31. Consider the following statements:

Order Date :2012-12-19

SINALOA 106 DEPT 1001COL. ROMA NORTE

Statement 1: The price return of a market-capitalization-weighted equity index will be lower

32. A market-capitalization-weighted equity index most likely:

33. A fundamental-weighted index based on the earnings yield most likely:

34. Which of the following indices least likely requires rebalancing?

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