1. Considering three stocks in the following table. Pt represents a price at day t, and Qt represents the number of shares outstanding at day t. Stock C splits ten-for-one at the beginning of day 2.

	P0	Q0	P1	Q1	P2	Q2
A	81.52	1000	85.32	1000	90.16	1000
B	48.12	2000	45.24	2000	47.52	2000
C	611.23	2000	632.25	2000	60.45	20000

1. Calculate the rate of return on a price-weighted index of the three stocks for the first day ( t =0 to t =1). (3 Marks)
2. Calculate the rate of return on a value-weighted index of the three stocks for the first day ( t =0 to t =1). (2 Marks)

c. What must happen to the divisor for the price-weighted index in day 2? (3 Mark)