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.

	P0	Q0	P1	Q1	P2	Q2
A	96	100	101	100	101	100
B	56	200	51	200	51	200
C	112	200	122	200	61	400

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).

b. What will be the divisor for the price-weighted index in year 2?

c.Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2).