Question: Use the following information to answer this question (note: the subscripts for the price variable, P. are time subscripts, Po is price at time 0

 Use the following information to answer this question (note: the subscripts

Use the following information to answer this question (note: the subscripts for the price variable, P. are time subscripts, Po is price at time 0 , etc.) A. Calculate first period rate of return on a price-weighted index of the three stocks. B. Calculate first period rate of return on an equally-weighted index of the three stocks. C. Calculate first period rate of return on a market-value-weighted index of the three stocks. D. Explain why, in this example, Mkt Val Wtd. R> Price-Wtd, R> Equally Wtd. R E. The prices for these 3 stocks do not change in the second period, except for Stock B, which experiences a 2 -for-1 split. Find the value of the new divisor for the price-weighted index of the three stocks

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