Based on the information given for the three stocks, calculate the first-period gross and net return

(from t = 0 to t = 1) on

a. a market-value-weighted index.

b. an equally-weighted index.

Note: The subscripts 0, and 1 indicate time t = 0 and t = 1 respectively.

P0 Q0 P1 Q1

Stock A $70 200 $72 200

Stock B $85 500 $81 500

Stock C $105 300 $98 300

Answer rating: 100% (QA)

Part a We need to use the following formula to arrive at the rate of return Rate of Return MarketVal... View the full answer