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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

Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares

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. Stock A B C Po 80 30 65 lo 250 800 800 a. Rate of return b. New divisor c. Rate of return P1 85 25 80 01 250 800 800 % P Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t =0 to t = 1). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the new divisor for the price-weighted index in year 2. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Calculate the rate of return for the second period (t=1 to t= 2). Note: Round your answer to 2 decimal places. 0.00 % 85 25 40 22 250 800 1,600

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