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Consider the three stocks in the following table. Pe represents price at time t, and ot represents shares outstanding at time e Stock splits two-for-one

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Consider the three stocks in the following table. Pe represents price at time t, and ot represents shares outstanding at time e Stock splits two-for-one in the last period. Po 97 57 00 100 200 200 Pi 102 52 124 0: 100 200 200 P2 102 52 62 02 100 200 400 114 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 tot = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return 3.42% 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 tot -2). Rate of return %

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