stock. n. Day 0 day 1

stock. stock

price. price

CSCO 300 20 22

INTC 400 15 15

MSFT 250 25 23

1.Calculate the rate of return on a price weighted index of the three stocks for thefirst day assuming a divisor of 2.40

2.Calculate the rate of return on a value weighted index of the three stocks for the first day assuming a divisor of 100.

3.MSFT splits its stock two-for-one on day 2 while the other two stock prices remain the same, recalculate the value of each index on day 2. Justify your results.