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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

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 (t=2).

P0 Q0 P1 Q1 P2 Q2
A

45

100 47.5 100 47.5 100
B 25 200 22.5 200 22.5 200
C 100 200 110 200 55 400

a. calculate the return on a price-weighted index, a value-weighted index and an equally weighted index of the three stocks, respectively, during the 1st year (t=0 to t=1). b. what must be the new divisor for the price-weighted index in the 2nd year?

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