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

Consider the three stocks in the following table. Pt represents price at time , and Qt represents shares outstanding at time . Stock C splits two for one in the last period.

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a. Calculate the rates of return on the price-weighted index of the three stocks (t = 0 to t= 1, and t1 to t2):

b. Calculate the rates of return on the market-value-weighted index of the three stocks (t = 0 to t= 1, and t1 to t2):

c. Calculate the rates of return on the equally weighted index of the three stocks (t = 0 to t= 1, and t1 to t2)

B 90 50 100 Qo 100 200 200 P1 95 45 110 Q1 100 200 200 P2 95 45 55 Q2 100 200 400

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