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

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:___%

PO P1 A B 84 44 88 QO 100 200 200 89 39 98 Q1 100 200 200 P2 89 39 49 Q2 100 200 400