Question
Consider the three stocks in the following table. Pt represents price at time t, and Q+ represents shares outstanding at time t. Stock C
Consider the three stocks in the following table. Pt represents price at time t, and Q+ represents shares outstanding at time t. Stock C splits two-for-one in the last period. Pe P1 Q1 P2- Q2 A 85 100 90 100 98 100 B 45 200 40 200 40 200 C 98 200 100 200 50 400 Required: 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 4.31 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 1.98 x
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