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A B 11. Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t.
A B 11. Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t. Stock C splits two for one in the last period. Po Qo P. Q P2 90 100 95 100 95 100 50 200 45 200 45 200 C 100 200 110 200 55 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (1 = 0 to 1 = 1). b. What must happen to the divisor for the price-weighted index in year 2? c. Calculate the rate of return for the second period (1 = 1 to 1 = 2)
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