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). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500.

		Price
	Shares (millions)		1/1/19			1/1/20			1/1/21
Douglas McDonnell	415		$	84		$	89		$	106
Dynamics General	225			23			16			30
International Rockwell	350			52			41			55

a. Calculate the initial value of the index if a value-weighting scheme is used. (Round your answer to 2 decimal places.)

Index value _________-

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

2019 Return ______%

2020 Return ______%