Consider the three stocks in the following table. Pe represents price at time t, and Qe represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C . Pe 89 49 98 Rate of return Po 100 200 200 P₁ 94 44 108 Rale of retur b. An equally weighted index 9 100 200 200 Required: 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 P₂ 94 44 54 9₂ 100 200 400

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
Problem 3Q
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Consider the three stocks in the following table. Pe represents price at time t, and Qe represents shares outstanding at time & Stock C
splits two-for-one in the last period.
A
B
O
2828
Pe
89
49
98
Rate of return
Po
100
200
200
P₁
94
44
108
Rate of return
b. An equally weighted index
01
100
200
200
P₂
94
44
54
Required:
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
9₂
100
200
400
Transcribed Image Text:Consider the three stocks in the following table. Pe represents price at time t, and Qe represents shares outstanding at time & Stock C splits two-for-one in the last period. A B O 2828 Pe 89 49 98 Rate of return Po 100 200 200 P₁ 94 44 108 Rate of return b. An equally weighted index 01 100 200 200 P₂ 94 44 54 Required: 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 9₂ 100 200 400
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