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Consider the three stocks in the following table. P represents price at time t, and Qt represents shares outstanding at time t. Stock C splits
Consider the three stocks in the following table. P represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. (15pts) 1. 0 90 50 100 P1 95 45 110 100 200 400 100 200 200 100 200 200 95 45 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t-0 to t-1). (5pts) What must happen to the divisor for the price-weighted index at t-2? (3pts) Calculate the rate of return of the price-weight b. ed index for the second period (t-1 to t-2) c. (5pts) d. Calculate the rate of return on a market value-weighted index of the three stocks for the first period (t-0 to t-1).(5pts)
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