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Problem 4 . Consider the three stocks in Table 3 . P t represents prices at time t , and Q t represents shares outstanding

Problem 4. Consider the three stocks in Table 3.Pt represents prices at time t, and Qt represents shares
outstanding at time t. Stock C splits three-for-one in the last period at t=2.(25 points)
Table 3: Stock Index
a. Calculate the rate of return on a equally-weighted index of the three stocks for the first period (from
t=0 to t=1)
b. Calculate the rate of return on a price-weighted index of the three stocks for the second period (from
t=1 to t=2)
c. Calculate the rate of return on a market value-weighted index of the three stocks for the second period
(from t=1 to t=2)
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