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Consider the three stocks in the following table. P t represents price in dollars at time t , and Q t represents shares outstanding at

Consider the three stocks in the following table. Pt represents price in dollars at time t, and Qt represents shares outstanding at time t. (In the following questions, do not round intermediate calculations. Round your final answer to 2 decimal places. Omit the "%" sign in your response.)

P0 Q0 P1 Q1 P2 Q2
A 90 100 95 100 95 100
B 50 200 45 200 40 200
C 100 200 100 200 110 200

Part I: Suppose you bought a value-weighted portfolio including stocks A,B and C at t=0 and hold it to t=2 without trading after t=0:

a.

Calculate the portfolio weight of A at t=0.

Weight %

b.

Calculate the rate of return of this portfolio for the first period (t = 0 to t = 1).

Rate of return %

c.

Calculate the portfolio weight of A at t=1.

Weight %

d.

Calculate the rate of return of this portfolio for the second period (t = 1 to t = 2).

Rate of return %

Part II: Suppose you bought an equal-weighted portfolio including stocks A,B and C at t=0 and hold it to t=2 without trading after t=0:

e.

Calculate the portfolio weight of A at t=0.

Weight %

f.

Calculate the rate of return of this portfolio for the first period (t = 0 to t = 1).

Rate of return %

g.

Calculate the portfolio weight of A at t=1.

Weight %

h.

Calculate the rate of return of this portfolio for the second period (t = 1 to t = 2).

Rate of return %

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