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

	P0	Q0	P1	Q1	P2	Q2
A	90	100	95	100	95	100
B	50	200	45	200	45	200
C	100	200	110	200	55	400

a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t=1).

b. What must happen to the divisor for the price- weighted index in year 2?

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