Highlight the limitations of the following methods of dealing with risk in capital budgeting: (i) Simulation analysis. (3 marks) (ii) Sensitivity…

Highlight the limitations of the following methods of dealing with risk in capital budgeting: (i) Simulation analysis. (3 marks) (ii) Sensitivity…

During the same time period (1 July 1998 to 1 July 2003), the four companies:
Issued no additional shares
Had no stock dividends or split
Paid no cash dividend.
Required:
            (i)         A four-stock index that is value-weighted.                                                           (3 marks)
            (ii)         A four-stock index that is price-weighted.                                                            (3 marks)
            (iii)        A four-stock index that is equally weighted.                                             (3 marks)
                                                                                                                        (Total: 20 marks)
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