Consider the three stocks in the following table. P(t) represents price at time t, and Q (t) represents share outstanding at time t. Stock C splits two for one in the last period.

	P(0)	Q(0)	P(1)	Q(1)	P(2)	Q(2)
A	90	100	95	100	95	100
B	50	200	45	200	45	200
C	100	200	110	200	55	400

1. First, calculate the price weighted indexes at t=0 and t=1. Based on the two numbers calculate the rate of return.

2. What must happen to the divisor for the price-weighted index in year 2?

3. Calculate the price weighted index at t=2. Based on the index number at t=1 and t=2, calculate the rate of return.