You need the following information to answer the following FOUR questions.

Assume that there are two stocks in the world (STOCK A and STOCK B) as presented below:

STOCK P0 Q0 P1 Q1

A 35 200 29.75 200

B 30 100 27 100

P0 represents the price per share at time period 0 (today).

Q0 represents the number of shares outstanding at time period 0 (today).

P1 represents the price per share at time period 1 (one year from today).

Q1 represents the number of shares outstanding at time period 1 (one year from today).

Assume that you have a total of $65 to invest on P0.

4) If your portfolio is a PRICE-WEIGHTED AVERAGE (a PRICE-WEIGHTED INDEX) of the two stocks, what is your rate of return over the period (from P0 to P1)?

5) If your portfolio is a PRICE-WEIGHTED AVERAGE (a PRICE-WEIGHTED INDEX) of the two stocks, how many shares of STOCK A do you buy? (YOU CAN BUY A FRACTION OF A SHARE)

6) If your portfolio is an EQUALLY-WEIGHTED INDEX of the two stocks, how many shares of STOCK B do you buy? (YOU CAN BUY A FRACTION OF A SHARE)