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Consider the three stocks in the following table. Pe represents price at time t, and Qt represents shares outstanding at time . Stock C splits

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Consider the three stocks in the following table. Pe represents price at time t, and Qt represents shares outstanding at time . Stock C splits two-for-one in the last period. Po B 80 40 80 Qo 100 200 200 Pi 85 35 90 01 100 200 200 P2 85 35 45 Q2 100 200 400 K a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to 1 = 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 eBook eferences c. Calculate the rate of return of the price-weighted index for the second period (t = 1 tot -2). Rate of return %

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