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. P0Q0P1Q1P2Q2A821008710087100B422003720037200C842009420047400 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 indexb. An equally weighted index

Rate of return refers to the percentage of a base quantity or amount that an investor receives from…

Answered: Consider the three stocks in the…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: The Basic Tools Of Finance

Section: Chapter Questions

Problem 6PA

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

	P₀	Q₀	P₁	Q₁	P₂	Q₂
A	82	100	87	100	87	100
B	42	200	37	200	37	200
C	84	200	94	200	47	400

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

b. An equally weighted index

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