1. Considering four stocks in the following table. Pt represents a price at the end of day t, and Qt represents the number of shares outstanding at the end of day t. At the beginning of day 2, stock C splits ten-for-one; and stock D splits one-for-two. PO lo P1 Q1 P2 Q2 A 81.52 1000 85.32 1000 90.16 1000 B 48.12 2000 45.24 2000 47.52 2000 611.23 2000 632.25 2000 60.45 20000 D 16.26 3000 17.16 3000 34.11 1500 a. Calculate the of return on a price-weighted index of the four stocks for first day (t =0 to t =1). (2 Marks) b. Calculate the rate of return on a value-weighted index of the four stocks for the first day (t =0 to t =1). (2 Marks) c. What must happen to the divisor for the price-weighted index at the beginning of day 2? (3 Mark) d. Calculate the rate of return on a price-weighted index of the four stocks for the second day (t =1 to t =2). (3 Marks) 2. Quality Home Made Ice Cream has plans to pay decreasing annual dividends of $1.60, $1.50, and $1.35 over the next three years, respectively. After that, the firm will increase the dividend by 5 percent each year. What is the value of this stock today at a discount rate of 11 percent per year