Business: A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $16, $24, and $55. The number of outstanding shares for each is 640,000 shares, 540,000 shares, and 240,000 shares, respectively. If the stock prices changed to $20, $22, and $57 today respectively, what is the 1-day rate of return on the index

A benchmark market value index is comprised of three

cris6969

02.02.2022

The 1-day rate of return on the index = 5.36%

Explanation:

Index Value = Sum of (Outstanding Shares*Share Price)

q p mv q1 p1 mv1

640,000 16 10240000 640000 20 12800000

540,000 24 12960000 540000 22 11880000

240,000 55 13200000 240000 57 13680000

36400000 38360000

Note: q/q1 = no of shares, p = price per share, mv/mv1 = market value, p1 = changed price per share

Return = (Index Value Today - Index Value Yesterday)/Index Value Yesterday

Return = (38360000 - 36400000) / 36400000

Return = 0.05385

Return = 5.36%

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Jasten

14.10.2020

8 orders per year

Explanation:

Annual demand, D = 2,000 units

Ordering cost, O = $50 per order

Holding cost, H = $3.20

$Economic\ order\ quantity(Q)=\sqrt{\frac{2\times D\times O}{H} }$

$Economic\ order\ quantity(Q)=\sqrt{\frac{2\times 2,000\times 50}{3.2} }$

= 250 units

Hence,

No. of orders per year $=\frac{D}{Q}$

$=\frac{2,000}{250}$

= 8 orders per year

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