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Consider the three stocks in the following table. Stock Initial Price Final Price Shares Outstanding (millions) A $80 $100 100 B $50 $30 300 C

Consider the three stocks in the following table.

Stock

Initial Price

Final Price

Shares Outstanding (millions)

A

$80

$100

100

B

$50

$30

300

C

$120

$125

100

1. Calculate the rate of return on an equally weighted index of the three stocks.

2. Calculate the rate of return on a price-weighted index of the three stocks.

3. Calculate the rate of return on a market-weighted index of the three stocks.

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