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Consider the four stocks in the following table. Pt represents price at time t and Qt represents shares outstanding at time t. Stock Qo P1

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Consider the four stocks in the following table. Pt represents price at time t and Qt represents shares outstanding at time t. Stock Qo P1 Q1 A 50 200 45 200 B 80 500 100 500 C 200 300 240 300 D 100 1000 90 1000 A. Calculate the rate of return on a (1) price-weight index, (2) value-weighted index, and (3) equal weighted index. (20 points) B. Now suppose for stock B, P1 - 55. Q1 = 1000, calculate the rate of return on a price-weighted index. (12 points)

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