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  3. consider the three stocks in the following table.

Consider the three stocks in the following table. Pt represents price at time t, and Qt represents...

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Finance

Consider the three stocks in the following table.Pt represents price at time t, andQt represents shares outstanding at timet. Stock C splits two-for-one in the last period.

P0Q0

P1

Q1P2

Q2

A97100102100102

100

B572005220052200
C11420012420062400

a. Calculate the rate of return on aprice-weighted index of the three stocks for the first period(t = 0 to t = 1). (Do not roundintermediate calculations. Round your answer to 2 decimalplaces.)

Rate of return______%

b. What will be the divisor for theprice-weighted index in year 2? (Do not round intermediatecalculations. Round your answer to 2 decimalplaces.)

Divisor_______

c. Calculate the rate of return of theprice-weighted index for the second period (t = 1 tot = 2).

Rate of Return______%

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