Response to the following problem:
Imagine that the All Ordinaries Index (All Ords) is based on the prices of five shares. The opening and closing prices for each of the five shares in the All Ords are given in the following table.
|
Share
|
|
Share Price
|
|
No. of Shares
|
Closing
|
Opening
|
|
Ace Computers
|
10 000
|
$6.50
|
$7.40
|
|
Coburn Motor Company
|
26 000
|
3.70
|
3.40
|
|
National Soap & Cosmetics
|
18 000
|
11.00
|
9.60
|
|
Ronto Foods
|
31 000
|
7.30
|
7.20
|
|
Wings Aircraft
|
14 000
|
9.60
|
8.70
|
a. Assuming the index had a value of 2946.2 at the end of the previous day, calculate the index's new value.
b. Assuming the index had a value of 3427.1 a year ago, describe the apparent market behaviour over the last year. Was it a bull or a bear market?