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Consider the three stocks in the following table. P t represents price at time t , and Q t represents shares outstanding at time t.
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period.
P0 | Q0 | P1 | Q1 | P2 | Q2 | |
A | 98 | 100 | 103 | 100 | 103 | 100 |
B | 58 | 200 | 53 | 200 | 53 | 200 |
C | 116 | 200 | 126 | 200 | 63 | 400 |
Calculate the first-period rates of return on the following indexes of the three stocks:
a. A market valueweighted index
b. An equally weighted index
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