You want to create a price-weighted index consisting of the following three stocks. At t = 0, you arbitrarily set the initial value of the index at 100. August (t=0) Share Price September (t=1) Share Price Stock A $20 $24 Stock B $50 $55 Stock C $90 $108 (a) Given a (hypothetically) same percentage change in price - e.g., 1% - which stock will have the greatest impact on the value of index? Why? Explain in words. (b) Define a divisor as a constant that divides the sum of the three prices (price of A + price of B+ price of C) to reach the index value. What is the value of the divisor at t=0? (c) Compute the price-weighted index value at t=1 (Round the index value to two decimal places). What is the monthly percentage return on the index from t= 0 to t = 1? (d) Now consider a 3-for-1 stock split for stock C in September, t = 1. That is, each old share of stock C becomes 3 new shares while the price per share is only one third of $108. What is the new value of the divisor? (Round it to four decimal places) You want to create a price-weighted index consisting of the following three stocks. At t = 0, you arbitrarily set the initial value of the index at 100. August (t=0) Share Price September (t=1) Share Price Stock A $20 $24 Stock B $50 $55 Stock C $90 $108 (a) Given a (hypothetically) same percentage change in price - e.g., 1% - which stock will have the greatest impact on the value of index? Why? Explain in words. (b) Define a divisor as a constant that divides the sum of the three prices (price of A + price of B+ price of C) to reach the index value. What is the value of the divisor at t=0? (c) Compute the price-weighted index value at t=1 (Round the index value to two decimal places). What is the monthly percentage return on the index from t= 0 to t = 1? (d) Now consider a 3-for-1 stock split for stock C in September, t = 1. That is, each old share of stock C becomes 3 new shares while the price per share is only one third of $108. What is the new value of the divisor? (Round it to four decimal places)