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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

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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 195 $ 97 $100 5113 Dynamics General 455 27 22 36 International Rockwell 230 56 45 62 a. Calculate the initial value of the index if a price-weighting scheme is used, 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 %

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