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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. Stock C
Consider the three stocks in the following table. P+ represents price at time t, and Q+ represents shares outstanding at time t. Stock C splits two-for-one in the last period. ABC Po 20 P1 01 P2 02 92 100 97 100 97 100 52 200 47 200 47 200 104 200 114 200 57 400 Required: 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. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Divisor c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t = 2). Rate of return %
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