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Consider the three stocks in the following table. Pt represents price at time t, and 0 represents shares outstanding at time t. Stock C splits
Consider the three stocks in the following table. Pt represents price at time t, and 0 represents shares outstanding at time t. Stock C splits two-for-one in the last period. Po 00 PL 01 P2 02 101 100 100 204 200 200 400 100 101 96 56 112 200 51 122 51 200 61 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (r=0 to = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of retum 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
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