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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 timet. Pi Qi A

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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 timet. Pi Qi A B Po 90 50 Qo 100 200 200 95 45 100 200 P2 95 45 Q2 100 200 200 100 110 200 110 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (from t = 0 tot = 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 tot = 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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