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	420		$	63		$	67		$	84
Dynamics General	450			53			47			61
International Rockwell	250			82			71			87

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, 2016? For the year ending December 31, 2017?