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Consider the three stocks in the following table. Pt represents price at time t, and ot represents shares outstanding at time t. Stock C splits
Consider the three stocks in the following table. Pt represents price at time t, and ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Po 97 57 114 lo 100 200 200 PI 102 52 124 ll 100 200 200 P2 102 52 62 02 100 200 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t = 1). (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 c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t= 2). Rate of return %
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