Question: Consider the following data for the three stocks that make up the market: a. What is the single-period return on the price-weighted index constructed from

Consider the following data for the three that make up the market:

a. What is the single-period return on the price-weighted index constructed from the three stocks?
b. What is the single-period return on the value-weighted index constructed from the three stocks using a divisor of 100?
c. What is the single-period return on the price-weighted index constructed from the three stocks if stocks A and B were to split 2 for 1 and 4 for 1, respectively, after period 0?
d. What is the single-period return on the value-weighted index constructed from the three stocks if stocks A and B were to split 2 for 1 and 4 for 1, respectively, after period 0?

Stock 200 500 600 $70 $70 $25

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a The index at t 0 is 60 80 203 5333 At t 1 it is 70 70 253 55 for a rate of return of 313 b S... View full answer

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