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1. Consider the three stocks in the following table. P t represents price at time t, and Q t represents shares outstanding at time t.
1. Consider the three stocks in the following table. Ptrepresents price at time t, and Qtrepresents shares outstanding at time t. Stock C splits two-for-one in the last period.
| P0 | Q0 | P1 | Q1 | P2 | Q2 |
A | 90 | 100 | 95 | 100 | 95 | 100 |
B | 52 | 200 | 45 | 200 | 45 | 200 |
C | 100 | 200 | 110 | 200 | 55 | 400 |
- Calculate the rate of return on a price-weighted index of the three stocks for the first period (from t=0 to t=1 by calculating the index at t=0 and t=1)
- Calculate the divisor (initially equal to three) for the price-weighted index in year 2?
- Calculate the rate of return (%)Vof the price-weighted index for the second period (t=1 to t=2).
d. Calculate the first-period rates of return (%) on the following indexes of the three stocks using market valueweighted index
e. Calculate the first-period rates of return (%) on the following indexes of the three stocks using equally weighted index
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