Suppose the following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance):

	Price
	Shares (Millions)	1/1/19	1/1/20	1/1/21
Douglas McDonnell	340	$103	$106	$118
Dynamics General	450	$45	$39	$53
International Rockwell	410	$74	$63	$79

a. Calculate the initial value of the index if a price-weighting scheme is used.

b. What is the rate of return on this index for the year ending December 31, 2019? For the year ending December 31, 2020?