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

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Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. B C Pe 90 45 80 00 425 450 650 Pi 95 40 90 01 425 450 650 P2 02 95 425 48 450 45 1,300 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. Calculate the new divisor for the price weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Now divisor c. Calculate the rate of return for the second period (t=1 to t=2). Rate of return %

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