Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period.
P0 | Q0 | P1 | Q1 | P2 | Q2 | |
A | 96 | 100 | 101 | 100 | 101 | 100 |
B | 56 | 200 | 51 | 200 | 51 | 200 |
C | 112 | 200 | 122 | 200 | 61 | 400 |
Calculate the first-period rates of return on the following indexes
of the three stocks: (Do not round intermediate
calculations. Round your answers to 2 decimal
places.)
a. A market value–weighted index
b. An equally weighted index
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