Consider the three stocks in the following table. Pt represents price at time t, and Qt...
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Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. Stock A B C Po 80 30 65 lo 250 800 800 a. Rate of return b. New divisor c. Rate of return P1 85 25 80 01 250 800 800 % P₂ Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t =0 to t = 1). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the new divisor for the price-weighted index in year 2. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Calculate the rate of return for the second period (t=1 to t= 2). Note: Round your answer to 2 decimal places. 0.00 % 85 25 40 22 250 800 1,600 Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. Stock A B C Po 80 30 65 lo 250 800 800 a. Rate of return b. New divisor c. Rate of return P1 85 25 80 01 250 800 800 % P₂ Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t =0 to t = 1). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the new divisor for the price-weighted index in year 2. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Calculate the rate of return for the second period (t=1 to t= 2). Note: Round your answer to 2 decimal places. 0.00 % 85 25 40 22 250 800 1,600
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a To calculate the rate of return on a priceweighted index for the first period t0 to t1 we need to ... View the full answer
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