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Consider the three stocks in the following table. Pt represents price at time I and Qt represents shares outstanding at time to Stock splits two
Consider the three stocks in the following table. Pt represents price at time I and Qt represents shares outstanding at time to Stock splits two for one in the last period. A B C Pe 70 45 50 475 850 300 P2 75 40 60 475 850 3ee P2 75 40 30 Q2 475 850 600 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. Calculate the new divisor for the price-weighted index in year 2. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) New divisor c. Calculate the rate of return for the second period (t=1 to t= 2). (Round your answer to 2 decimal places.) Rate of return 96
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