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Fuji island stock market consisting of three stocks is described by the following table. Stock PO QO Kiwi 12 500 Mango 18 400 Coco 60

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Fuji island stock market consisting of three stocks is described by the following table. Stock PO QO Kiwi 12 500 Mango 18 400 Coco 60 200 P1 Q1 16 500 12 400 65 200 P2 16 ? 65 Q2 500 ? 200 1) Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t=1). (6 points) 2) On t=2, stock Mango had a "3 for 2" stock split (three new shares replacing two old shares). What will be P2 and Q2 for Mango? (3 points) Calculate the new divisor for the price-weighted index in year 2. (4 points) 3) What is the rate of return on the market value weighted index for the first period (t=0 to t=1)? (6 points) 4) The equally weighted market index also consists of the same three stocks, what is the rate of return on this index from t=0 to t=1? (6 points)

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