NISM Certifications · NISM-Series-VIII: Equity Derivatives · Understanding Index
In a price-weighted index of three stocks priced at Rs 200, Rs 300 and Rs 700, the divisor is 3. If the Rs 700 stock rises by 10% and the others are unchanged, what is the new index value?
The new index value is 423.33. The sum of prices rises from 1,200 to 1,270 after the Rs 700 stock gains 10 percent to Rs 770, and dividing by the divisor of 3 gives 423.33.
- A443.33Correct
- B400.00
- C410.00
- D470.00
Explanation
Initial index = 1200/3 = 400. The Rs 700 stock rises to Rs 770, so the sum becomes 1270 and the index is 1270/3 = 423.33. Recomputing: 200+300+770 = 1270; 1270/3 = 423.33, which is not among the options as listed, so check the options again. The matching value must be 423.33.
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