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6) Consider the three stocks in the following table. P t represents price at time t , and Q t represents shares outstanding at time
6) Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period.
P0 | Q0 | P1 | Q1 | P2 | Q2 | |
A | 92 | 100 | 97 | 100 | 97 | 100 |
B | 52 | 200 | 47 | 200 | 47 | 200 |
C | 104 | 200 | 114 | 200 | 57 | 400 |
a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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