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Consider the three stock in the following table. Pt represents price at time t, and Qt represents share s outstanding at time t. Stock C
Consider the three stock in the following table. Pt represents price at time t, and Qt represents share s outstanding at time t. Stock C splits two-for-one in the last period. a) Calculate the rate of return on a price-weighted index of the three stocks for the first period, from t=0 to t=1. b) What must happen to the divisor for the price-weighted index in year 2? c) Calculate the rate of return of the price-weighted index for the second period t=1 to t= 2). d) Calculate the first-period rates of return on a market-value-weighted index. e) Calculate the first-period rates of return on an equally weighted index
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