Create an index from the 7 stocks in the table below. An excel spreadsheet would be useful. Using the information presented in the table, answer the following set of questions:

a. What is the return on the price-weighted index for each of Day 1, Day 2, and Day 3?

b. Now assume the index is value-weighted. What is the return to the value-weighted index on Day 1, Day 2, and Day 3?

c. If the index were equal-weighted instead of value-weighted, would the Day 1 return be greater than, less than, or equal to the value-weighted index return in part b? Provide intuition, in addition to a specific numerical return.

d. Compute the index weights at the end of Day 1 for the equal weighted index, assuming any rebalancing has not yet taken place. If the equally weighted index rebalances at the end of each day, what is the required turnover on Day 1?

Stock Ticker	Shares Outstanding	Closing Prices
		Day 0	Day 1	Day 2	Day 3
BDT	100,000,000	200.00	190.00	188.00	186.00
BK	5,000,000,000	5.00	5.25	5.50	5.75
HJM	2,500,000,000	12.50	13.75	14.50	15.00
HL	250,000,000	150.00	145.00	142.00	140.00
KWF	875,000,000	85.00	83.00	82.00	80.00
LBR	1,250,000,000	22.00	23.00	24.00	25.00
MRKV	2,250,000,000	15.00	16.50	17.00	18.00