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G H lestion 2: Consider three stocks in the following table. P, repsents price at time t, and Q, represents shars outstanding at timet Po

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G H lestion 2: Consider three stocks in the following table. P, repsents price at time t, and Q, represents shars outstanding at timet Po A $ 125.00 B$ 65.00 C$ 200.00 QO P 100 $ 135.00 200 $ 59.00 400 $ 214.00 Q1 100 200 400 on a Calculate the rate of return on the price weighted index of the three stocks from t=0 tot 1. (3 points) Index Value at time (0) = $ 130.00 Index Value at time (1) - $ 136.00 Rate of return = 0.046153846 or 4.62% b. If stock C has a two-for-one stock split at t -1, what should be the new divisor at end of perlod t = 1? (3 points) Index Value piror to stock split ? Index Value after stock split - ? New divisor

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