Question: Hello, Im having trouble with this problem. Could someone please help me? Consider the three stocks in the following table. Pt represents price at time
Hello, Im having trouble with this problem. Could someone please help me?
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 83 100 88 100 88 100
B 43 200 38 200 38 200
C 86 200 96 200 48 400
a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t = 1). (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Rate of return _______%
b. What will be the divisor for the price weighted index be in year 2? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Divisor ________
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