1. Consider the three stocks in the following table. P:represents price at time t, and Q represents shares outstanding at time t. Stock C splits two for one in the last period. (16pts Q1 100 200 200 P2 95 45 Po 50 100 100 200 200 95 45 110 100 200 400 Calculate the rate of return on a price-weighted index of the three stocks for the first period (t-0 to t1). (5pts) What must happen to the divisor for the price-weighted index at t-2? (3pts) Calculate the rate of return of the price-weighted index for the second period (t 1 to t=2). a. b. c. (3pts) d. Calculate the rate of return on a market value-weighted index of the three stocks for the first period (t-0 to t=1)(5pts) 2. Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and maturities of six months. The stock price is $45 in six months. (6pts) a. What would be the profit per share of stock to an investor who buys the call for $4? (3pts) b. What would be the profit per share of stock to an investor who buys the put for $4? (3pts) 3. Refer to Figure 2.10 in Chapter 2. Suppose you buy five September expiration call options of Apple stock with exercise price $105. (10pts) a. If the stock price in August is $100.30, will you exercise your call? What are the profit and rate of return of your option contract if you exercise your call? (5pts) b. What about the profitloss and rate of return if you had bought five September put contracts with exercise price 105? (5pts) 4. What is the difference between a put option and a short position in a futures contract? (4pts)