Hello, I was unsure which forum was correct to post this in, but given that this problem comes from a comprehensive book on technical analysis hopefully this section is suitable. As many of you are aware, there are three common methods for gauging overall market trends. These are the -- price weighted average (djia), market capitalization weighted average (s+p) and the equally weighted average. While trying to caculate the market capitalization by myself in the following example I ran into some issues in arriving at the numbers: Market Capitalization Weighted Index: Total market Cap: Day1: (5*80)+(8*85)+(6*25)+(3*20) 400+680+150+60 =1290 * x = 100 --- 1290 * x = 100, x=0.0775193 Day2: (5*88)+(8*85)+(6*25)+(3*20) 440+680+150+60 =1330 * x = 103.10 Day3: (5*88)+(8*85)+(6*25)+(3*22) 440+680+150+66 =1336 * x = 103.56 Day4: (5*88)+(8*85)+(6*27.5)+(3*22) 440+680+165+66 = 1351 * x = 104.72 So my numbers are not that far from the answer, but the highlighted text must be wrong as its not 1,270,000,000 its 1,290,000,000 and the fact that these decimals are not all that close (i.e. day 3 is given as 103.46 but calculated as 103.56, day ) has me looking to see if I have went wrong anywhere. There is a formula that got cut off in my book.
I was able to find the formula online in another text version. Which is: However its unfortunate that I have obtained such rounding errors and was unable to derive where that could be coming from to arrive at their answers on my own accord.
For some reason, I am having trouble computing the market capitalization index. I have an additional problem, where I am struggling to come up with derived at answers. I understand these problems take time, so if anyone would be willing to look into it and help me figure this out I can send them a small amount via paypal for the effort. I have an excel document with a similiar problem where I am struggling computing this particular index and I am getting exhausted trying to figure out where I am going wrong. Thanks!