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Please show work on paper so it is easy to follow. Consider the three stocks in the following table. Pt represents price at time t,
Please show work on paper so it is easy to follow.
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. (LO 2-2) Po QO P1 Q1 P2 Q2 A 90 100 95 100 95 100 B 200 200 45 200 50 100 45 110 200 200 55 400 a Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t= 1). b. What must happen to the divisor for the price-weighted index in year 2? c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t= 2)Step by Step Solution
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