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Consider the three stocks in the following table. P+ represents price at time t, and ot represents shares outstanding at time t. Stock C splits

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Consider the three stocks in the following table. P+ represents price at time t, and ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Po P 01 P2 02 A 80 100 100 85 100 85 35 B 40 200 200 35 200 C 80 200 90 200 45 400 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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