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Consider the three stocks in the following table. P represents price at time t, and Q represents shares outstanding at time t. Qo P Q
Consider the three stocks in the following table. P represents price at time t, and Q represents shares outstanding at time t. Qo P Q P2 A 70 200 72 200 36 400 B 85 500 81 500 81 500 98 105 300 300 98 300 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 tot = 1). b. Calculate the value of the divisor in the second period (+2). Assume that Stock A had a 2-1 split during this period. c. Calculate the rate of return of the price-weighted index for the second period (t=l to =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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