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Problem 2-11 Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock
Problem 2-11 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. A B Po 80 85 35 20 275 650 950 A1 85 80 50 21 275 650 950 P2 85 80 25 Q2 275 650 1, 900 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return % b. Calculate the new divisor for the price-weighted index in year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.) New divisor c. Calculate the rate of return for the second period (t=1 to t=2). (Round your answer to 2 decimal places.) Rate of return %
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