Based on the following stock price and shares outstanding information, compute the beginning and ending values for a price-weighted index and a market-value-weighted index.

a. Compute the percentage change in the value of each index during the year.

b. Explain the difference in results between the two indexes.

c. Compute the percentage change for an unweighted index and discuss why these results differ from those of the other indexes.

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DECEMBER 31, 2011 DECEMBER 31, 2012 Shares Outstanding Shares Price Outstanding Price Stock K 20 100,000,000 2,000,000 25,000,000 32 100,000,000 4,000,000* 25,000,000 Stock M 80 45 Stock R 40 42 "Stock split two-for-one during the year.