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4. Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Po

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4. Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Po Qo P1 Q1 P2 Q2 A 90 100 95 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 110 200 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (from t = 0 to t = 1). b. Calculate the divisor for the price-weighted index if stock C splits 2:1 at t = 1. c. Calculate the rate of return for the price-weighted index for the second period (t = 1 to t = 2) after stock C splits 2:1 at t = 1. d. What will be the divisor from periods t = 3 onwards if no splits are expected? e. Calculate the first-period rate of return (from t = 0 to t = 1) on a market-value-weighted index. f. Calculate the first-period rate of return (from t = 0 to t = 1) on an equally-value-weighted index.

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