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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
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. A B C Q0 85 150 40 600 70 100 P1 Q1 90 150 35 600 80 100 P2 Q2 90 150 35 600 40 200 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.) Rate of return % 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.) New divisor c. Calculate the rate of return for the second period (t=1 to t = 2). (Round your answer to 2 decimal places.) Rate of return %
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