For the next  question, consider the two stocks, A and B, in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t.    P0 Q0 P1 Q1 A 50 100 45 100 B 30 200 34 200 Calculate the rate of return on a price-weighted index of the two stocks for between t = 0 and t = 1.  Assume the divisor value is 2. Enter your answer as a decimal, rounded to four decimal places (e.g, 0.0123).

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Q: 1 2 3 4 5 Stock A 0.11 0.07 0.14 -0.02 0.07 Stock B 0.06 0.01 0.04 0.02 -0.03 a. What are the…

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A: "Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must answer the…

Q: Consider a market value-weighted index consisting of 3 stocks: A, B, and C. The stocks' prices at…

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A: As per the given information: Spot price = $100K = $95r = 8%(continuously compounded)t = 1alpha σ=…

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.