1. The following three defense stocks are to be combined into a price-weighted stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Suppose that Douglas McDonnell shareholders approve a 3-for-1 stock split on January 1, 2017 and that the company enacts the stock split on January 2, 2017.

   		Price
   	Shares (millions)		1/1/16			1/1/17			1/1/18
   Douglas McDonnell	430		$	108		$	114		$	41.08
   Dynamics General	535			38			34			48
   International Rockwell	210			67			56			70

   a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

   New Divisor:

   b. Calculate the rate of return on the index for the year of 2017 (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

   Rate of Return: %