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.

	P0	Q0	P1	Q1	P2	Q2
A	90	425	95	425	95	425
B	45	450	40	450	40	450
C	80	650	90	650	45	1,300

A, Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1).

B, Calculate the new divisor for the price-weighted index in year 2.

C, Calculate the rate of return for the second period (t = 1 to t = 2).

Answer rating: 100% (QA)

Calculating PriceWeighted Index Returns A Rate of Return t 0 to t 1 Calculate the product of price a... View the full answer