Question: Consider the following data for the three stocks that make up the market: Stock A B Price $20 $20 $20 Initial date (t=0) Shares Outstanding

Consider the following data for the three stocks that make up

Consider the following data for the three stocks that make up the market: Stock A B Price $20 $20 $20 Initial date (t=0) Shares Outstanding 200 500 600 Final Date (t=1) Price $40 $30 $20 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, immediately after period 0? A. 34.62% B. 35.71% C. 50.00% D. 75.50%

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