Please show all work. Little if any credit will be received for answers without work.

Use the following information for Problem 5. The data are for a price-weighted index (e.g., Dow 30).

Stock Initial Price ($) Final Price ($)

A 500 650

B 300 420

5.

a) What is the initial value of the index?

b) If Stock B does a 2-for-1 split at the beginning of the period, what is the divisor d that preserves the index's value?