Question: Problem 2-11 Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock

 Problem 2-11 Consider the three stocks in the following table. Pt

Problem 2-11 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 B C Po 95 60 95 Qe 200 200 300 P1 100 55 110 Q1 200 200 300 P2 100 55 55 Q2 200 200 600 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 answer to 2 decimal places.) Rate of return % 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.) New divisor c. Calculate the rate of return for the second period (t=1 to t= 2). (Round your answer to 2 decimal places.) Rate of return %

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