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 three-for-one in the last period.

	P0	Q0	P1	Q1	P2	Q2
A	35	150	38	150	35	150
B	55	250	53	250	55	250
C	50	125	51	125	18	375

A. Calculate the rate of return for the price-weighted index for the period T = 0 to T = 1.

A.1.2%

B.1.4%

c.1.1%

D.1.3%

B.Calculate the rate of return for the price-weighted index for the period T = 1 to T = 2.

A.1.4%

B.1.2%

C.1.3%

D.1.1%

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

A.Decrease to 250

B.Decrease to 225

C.Increase to 350 D.Increase to 325