2. Consider the following three stocks: Stock A has 200M shares outstanding and is trading at $40 a share. Stock B is trading at $70, with 500M shares outstanding. Stock C has 600M shares and is trading at $10 a share.

a. What is the level of a price-weighted index comprised of the three stocks using a divisor of 10?

b. What would the return on the index be if stock B were split 2-for-1? What would the new divisor be?

c. What is the level of a value-weighted index comprised of the three stocks using a divisor of 100? d. What would the return on the index be if stock B were split 2-for-1? What would the new divisor be?