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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. B Po 99 59 118 Q0 100 200 200 P1 104 54 128 Q1 100 200 200 P2 104 54 64 Q2 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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