Question: 18. Examine the two methods for determining the index returns for these three stocks. Price Weighed A B C Index HPR 15-Feb 20.00 $ 50.00

18. Examine the two methods for determining the index returns for these three stocks. Price Weighed A B C Index HPR 15-Feb 20.00 $ 50.00 100.00 $ 56.67 16-Feb 15.00 $ 40.00 55.00 51.94 -8.33% Value Weighted Value Index HPR 15-Feb $ 180,000.00 $ 50,000.00 $ 10,000.00 $ 240,000.00 100.00 Shares 9000 1000 100 16-Feb $ 135,000.00 $ 40,000.00 $ 11,000.00 $ 186,000.00 77.50 -22.50% Shares 9000 1000 200 *Consider that Stock C had a 2/1 stock split after the market close on 2/15. a. In a short sentence or paragraph, explain precisely why the returns for these indexes are so different. What, specifically, drove the difference? b. What is the implication of these potential differences for measuring portfolio manager performance

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