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1. Consider the following three stocks, their prices (P) and number of shares (Q): P0 Q0 P1 Q1 Bruce 50 500 70 500 Hayes 250
1. Consider the following three stocks, their prices (P) and number of shares (Q):
P0 Q0 P1 Q1
Bruce 50 500 70 500
Hayes 250 100 400 100
Cooper 150 150 50 150
Assume that during period 1, Hayes had a 4-for-1 stock split, and their ending P=100 and ending Q=400. How would you need to adjust the divisor in order to maintain the index return you calculated in a. above?
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