Question: 3. Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C

3. 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

135

140

140

140

140

140

B

125

280

120

280

120

280

C

250

280

260

280

135

560

Calculate the first period rates of return on the following indexes of the three stocks (t = 0 to t = 1)

a. A market value-weighted index. (10 points)

b. An equally weighted index. (10 points

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