Question: Parts b and c Problem 4 Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding

Parts b and c Parts b and c Problem 4 Consider the three stocks in the

Problem 4 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. 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. What must happen to the divisor for the price-weighted index in year 2? e. Calculate the rate of return for the second period (t=1 to t=2)

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