Question 2 (20 Marks) a. The ABC Index is a price weighted stock index based on the 3 largest food processing firms. The data of the index is given in the following table: A P. 180 100 200 Q. 200 400 400 P1 190 90 220 Q1 200 400 400 P2 190 90 110 Q2 200 400 800 B Pt represents price at time t, and Qt represents shares outstanding at time t. i. Calculate the rate of return on the ABC Index of the three stocks for the first period (t = 0 to t = 1). Show all your calculations. 4 marks ii. Stock C splits two-for-one in the last period (t = 2). What must happen to the divisor for the price-weighted index in the last period? Show all your calculations. 4 marks b. Using the data contained in the table of part (a), calculate the first-period rates of return (t = 0 to t = 1) if the ABC index is a market value-weighted index. Show all your calculations. 4 marks C. What purposes do stock market indexes serve? 4 marks d. The Dow Jones Industrial Average differs from the Standard & Poor's 500 Index in at least two major respects. What are these two major differences? 4 marks