QUESTION 11 The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Douglas McDonnell Dynamics General International Rockwell Shares (millions) 430 535 210 1/1/16 $108 38 67 1/1/17 $114 34 56 1/1/18 $131 48 70 a. Calculate the initial value of the index if a price-weighting scheme is used. (Enter your answers rounded to 2 decimal places.) Index Value: b. What is the rate of return on this index for the year ending December 31, 2016? For the year ending December 31, 2017? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 2016 Return: % 2017 Return: % QUESTION 11 The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price Douglas McDonnell Dynamics General International Rockwell Shares (millions) 430 535 210 1/1/16 $108 38 67 1/1/17 $114 34 56 1/1/18 $131 48 70 a. Calculate the initial value of the index if a price-weighting scheme is used. (Enter your answers rounded to 2 decimal places.) Index Value: b. What is the rate of return on this index for the year ending December 31, 2016? For the year ending December 31, 2017? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 2016 Return: % 2017 Return: %