Dear tutor,

Please kindly help to solve this problem with explanation.

1. Consider the three stocks in the following table. P: represents price at time t, and Q: represents shares outstanding at time 1'. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 115 600 120 600 120 600 B 100 600 95 600 95 600 C 75 700 80 700 40 1,400 a. Calculate the rate of return on a price-weighted index of the three stocks for the rst period (t = 0 to t= 1). (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. (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). (Round your answer to 2 decimal places.) 2.Consider the three stocks in the following table. Pr represents price at time I, and Q: represents shares outstanding at time 1. Stock C splits two for one in the last period. Po Q0 P1 Q] P2 Qz A 110 115 115 115 115 115 B 100 230 95 230 95 230 C 200 230 205 230 110 460 Calculate the rst-period rates of return on the following indexes of the three stocks 0' = 0 to r = 1): (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market-value-weighted index. b. An equally weighted index. 3.An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 5% yields, what yield must municipals offer for the investor to prefer them to corporate bonds? (Round your answer to 2 decimal places.)