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3. Following is the stock price for three stocks for time 0 and time 1. Time 0 Time 1 #Shares 50 100 80 Stock A
3. Following is the stock price for three stocks for time 0 and time 1. Time 0 Time 1 #Shares 50 100 80 Stock A splits 2-for-1 between time 0 and 1 Stock Stock Price Price # Shares $55 $100 $60 A $30 $115 $40 A 100 B 100 80 C C What is the value of a price weighted index including all three stocks at time 0? (3 points) a) b) What is the new divisor for a price-weighted index after stock A's 2-for-l split? (4 points) c) What is the value of a price weighted index at time 1? (4 points) d) What is the rate of return on the price-weighted index for time 1? (3 pojnts) e) What is the rate of return on the value-weighted index for time 1? (4 points) f How does a stock split affect a value-weighted index? (3 points)
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