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Consider the stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Assume a price-weighted index

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Consider the stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Assume a price-weighted index is formed by three stocks, A, B and C. In the last period (moving from t=1 to t=2 ) stock C is split 2 for 1. a. What is the price of the index at time t=0 ? b. What is the price of the index at time t=1 ? c. What is the first-period (from t=0 to t=1 ) rate of return on the index? d. What is the divisor of the index at time t=2 ? e. What is the second-period rate of return (from t=1 to t=2 ) on the index

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