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
	Shares (millions)		1/1/16			1/1/17			1/1/18
Douglas McDonnell	215		$	64		$	68		$	82
Dynamics General	455			72			64			78
International Rockwell	250			101			90			106

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: %