The following three defense stocks are to be combined into a stock index in January 2016...

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The following three defense stocks are to be combined into astock index in January 2016 (perhaps a portfolio manager believesthese stocks are an appropriate benchmark for his or herperformance). Assume the index is scaled by a factor of 10 million;that is, if the total value of all firms in the market is $5billion, the index would be quoted as 500.
Price
Shares
(millions) 1/1/16 1/1/17 1/1/18
Douglas McDonnell 200 $ 70 $ 73 $ 87
Dynamics General 300 51 46 60
International Rockwell 390 80 69 86
a. Calculate the initial value of the index ifa value-weighting scheme is used. (Round your answer to 2decimal places.)
Index value
b. What is the rate of return on thisindex for the year ending December 31, 2016? For the year endingDecember 31, 2017? (A negative value should be indicated bya minus sign. Do not round intermediate calculations. Enter youranswers as a percent rounded to 2 decimal places.)
2016 return %
2017 return %

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The following three defense stocks are to be combined into astock index in January 2016 (perhaps a portfolio manager believesthese stocks are an appropriate benchmark for his or herperformance). Assume the index is scaled by a factor of 10 million;that is, if the total value of all firms in the market is $5billion, the index would be quoted as 500.PriceShares(millions)1/1/161/1/171/1/18Douglas McDonnell200$70$73$87Dynamics General300514660International Rockwell390806986a. Calculate the initial value of the index ifa value-weighting scheme is used. (Round your answer to 2decimal places.)Index valueb. What is the rate of return on thisindex for the year ending December 31, 2016? For the year endingDecember 31, 2017? (A negative value should be indicated bya minus sign. Do not round intermediate calculations. Enter youranswers as a percent rounded to 2 decimal places.)2016 return%2017 return%

		Price
	Shares (millions)		1/1/16		1/1/17		1/1/18
Douglas McDonnell	200		$	70	$	73	$	87
Dynamics General	300			51		46		60
International Rockwell	390			80		69		86