Question: An index is based on three stocks. Using the information in the table below, calculate the index return assuming it is value-weighted . Report your

  1. An index is based on three stocks. Using the information in the table below, calculate the index return assuming it is value-weighted. Report your answer as a percentage and to the nearest 0.01% (e.g. enter 3.95% as 3.95).

Stock

Initial Price

Final Price

Shares (in millions)

A

$10

$12

30

B

$250

$240

1

C

$100

$105

5

2. You bought a stock for $10 and sold it 2 years later for $14. Each quarter you received a $0.25 dividend. What was your annualized rate of return? Report your answer as a percentage and to the nearest 0.01% (e.g. enter 3.95% as 3.95).

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