Explanation

For an equal-weighted index, each security has the same weight in the index. To calculate the price return of an equal-weighted index:

1. Calculate the individual security returns:

   • Security 1: Return = ($6 - $5) / $5 = $1 / $5 = 0.20 or 20%
   • Security 2: Return = ($2 - $2) / $2 = $0 / $2 = 0.00 or 0%
   • Security 3: Return = ($4 - $3) / $3 = $1 / $3 = 0.3333 or 33.33%

2. Calculate the equal-weighted average return: Since it's an equal-weighted index with 3 securities, each security gets 1/3 weight.

   Index return = (20% + 0% + 33.33%) / 3 Index return = (53.33%) / 3 Index return = 17.78%

3. Check the options:

   • 17.8% matches our calculation of 17.78%
   • 20.0% would be incorrect
   • 21.1% would be incorrect

Important Note: The shares outstanding information is irrelevant for calculating price return of an equal-weighted index. Price return only considers price changes, not changes in shares outstanding or market capitalization.

Calculation verification:

• (0.20 + 0 + 0.3333) / 3 = 0.5333 / 3 = 0.1778 = 17.78%

Therefore, the price return of the index is closest to 17.8%, which corresponds to option A.