Question: Use data from the table below to answer this question: Day 0 Day 1 Price #shares Price #shares Stock A B C D 10

Use data from the table below to answer this question: Day 0

Use data from the table below to answer this question: Day 0 Day 1 Price #shares Price #shares Stock A B C D 10 21 89 42 21,000 18,000 7,000 12,000 7 21,000 8 18,000 151 7,000 55 12,000 a. (8 points) The price-weighted index on day 0 is computed with only the three stocks A, B and C. The index value on day 0 is 100. i. Compute the divisor on day 0. ii. What is the return on the price-weighted index on day 1? iii. Stock C is split 4-for-1 after the close of Day 1. What is the divisor for the price-weighted index after the split? iv. After the close of market on Day 1, Stock C is replaced by Stock D in the price-weighted index, and the new index is computed with only Stocks A, B and D. Compute the new divisor and the index value after this change to the index composition.

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