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The Hydro Index is a price weighted stock index based on the 5 largest boat manufacturers...

The Hydro Index is a price weighted stock index based on the 5 largest boat manufacturers in the nation. The stock prices for the five stocks are $10, $20, $80, $50 and $40. Assume that the divisor is 5. What is the value of a price weighted index?

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60

40

50

45

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Answer #1

Index Value = =1 [P(i)] / Divisor

= [$10 + $20 + $80 + $50 + $40] / 5 = $200 / 5 = $40

So, 2nd option is correct.

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