Q1: Fill in the blanks. MV1 is the market value of the stocks at time 1.

Q2: What is the divisor for the price weighted index at time 0? SHOW CALCULATIONS

Q3: What is the divisor for the price weighted index at time 1? SHOW CALCULATIONS

Q4: What are the price weighted, value weighted, and equally weighted indices at time 1? What are the index returns in these cases? SHOW CALCULATIONS

Table 1: Component stocks of Index X Stocks PO Rtn1 QO Pi MV1 Stock split? 10 | No D A 10 10 10% 11 B 20 2 0 -10% 18 20 No 30 10 4% 3 for 1 120 20 6% 1.5 for 1 Notes: Po is the stock price at time 0; Qo is the shares outstanding at time 0. Q1 is the shares outstanding at time 1. Rtn, is the return between time 0 and time 1, which is defined as: rtni =(P -Po/Po, whereas P, is the stock price at time 1. Stock split 3 for 1 means that the stock price after split is one third the pre-split level, while the number of shares outstanding triples (Hint: look at the explanation above for a 3 for 1 split, what do we mean by a 1.5 for 1 split, in terms of P and Q?) Table 1: Component stocks of Index X Stocks PO Rtn1 QO Pi MV1 Stock split? 10 | No D A 10 10 10% 11 B 20 2 0 -10% 18 20 No 30 10 4% 3 for 1 120 20 6% 1.5 for 1 Notes: Po is the stock price at time 0; Qo is the shares outstanding at time 0. Q1 is the shares outstanding at time 1. Rtn, is the return between time 0 and time 1, which is defined as: rtni =(P -Po/Po, whereas P, is the stock price at time 1. Stock split 3 for 1 means that the stock price after split is one third the pre-split level, while the number of shares outstanding triples (Hint: look at the explanation above for a 3 for 1 split, what do we mean by a 1.5 for 1 split, in terms of P and Q?)