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. Calculate the new divisor for the price-weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. Calculate the rate of return for the second period (t = 1 to t = 2).

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. A B C Po 65 75 50 ao 550 800 250 PI 70 70 60 01 550 800 250 P2 70 70 30 02 550 800 500