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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

  1. 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)
  2. Calculate the divisor (initially equal to three) for the price-weighted index in year 2?
  3. 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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