11. Consider the three stocks in the following table. P, represents price at time t, and Q, representsshares outstanding at time t. Stock C splits two for one in the last period.PoQoP₁Q₁ABC90501001002002009545110100200200P₂954555Q₂100200400a. Calculate the rate of return on a price-weighted index of the three stocks for the first period(t = 0 to t = 1).b. What must happen to the divisor for the price-weighted index in year 2?c. Calculate the rate of return for the second period (t = 1 tot = 2).

Here, Stock Split2:1CompanyPriceP0P1P2A $ 90.00 $ 95.00 $ 95.00B $ 50.00 $ 45.00 $…

11. Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t. Stock C splits two for one in the last period. Po Qo P₁ Q₁ 100 200 200 AB А с 90 50 100 100 200 200 95 45 110 P2 95 45 55 Q₂ 100 200 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). b. What must happen to the divisor for the price-weighted index in year 2? c. Calculate the rate of return for the second period (t = 1 tot = 2).

11. Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t. Stock C splits two for one in the last period. Po Qo P₁ Q₁ 100 200 200 AB А с 90 50 100 100 200 200 95 45 110 P2 95 45 55 Q₂ 100 200 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). b. What must happen to the divisor for the price-weighted index in year 2? c. Calculate the rate of return for the second period (t = 1 tot = 2).

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the three stocks in the following table. Pt represents price at time t, Qt represents shares outstanding at time t. Stock C splits two for one in the second period from t=1 to t=2. Calculate the rate of return on a price-weighted index consisting of the three stocks for the first period from t=0 to t=1. Answer in percentage. Stock P0 Q0 P1 Q1 P2 Q2 A 70 475 75 475 75 475 B 45 850 40 850 40 850 C 50 300 60 300 30 600 a. 0.00% b. 2.49% c. 6.06% d. 8.95% e. 1.30%
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 82 100 87 100 87 100 B 42 200 37 200 37 200 C 84 200 94 200 47 400 a. Calculate the rate of return on a price - weighted index of the three stocks for the first period (t = 0 tot = 1). b. What will be the divisor for the price - weighted index in year 2? c. Calculate the rate of return of the price - weighted index for the second period (t = 1 to t = 2). *note: Please explain why the reture rate for the second period is 0. Thanks!*
3.Consider the three stocks in the following table. P t represents price at time t, and Q1 represents shares outstanding at time t. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 90 100 96 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 a.Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t=1). b.What must happen to the divisor for the price-weighted index in year 2? Calculate the rate of return for the second period (t=1 to t=2)
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 87 100 92 100 92 100 B 47 200 42 200 42 200 C 94 200 104 200 52 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2).
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. PO 00 P1 01 P2 02 A 82 100 87 100 87 100 B 42 200 37 200 37 200 C 84 200 94 200 47 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return % b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Divisor c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2).
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. A B C Pe 86 46 92 Rate of return Divisor Q0 100 200 200 P1 91 41 102 Rate of return Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 4.14 % 91 100 200 200 P2 91 41 51 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2% 92 100 200 400 c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t = 2).
Consider the three stocks in the following table. Pt represents price at time t, Qt represents shares outstanding at time t. Stock C splits two for one in the second period from t=1 to t=2. Calculate the rate of return on a price-weighted index consisting of the three stocks for the first period from t=0 to t=1. Answer in percentage. Answer options: 0.00% 2.49% 6.06% 8.95% 1.30%
Consider the three stocks in the following table. Pt represents price at time t, and ot represents shares outstanding at time t. Stock C splits two for one in the last period. Stock Po P1 21 75 65 75 75 75 55 150 50 150 50 150 110 150 115 150 60 300 A B с с 20 75 P2 a. Rate of return b. Rate of return Required: Calculate the first-period rates of return on the following indexes of the three stocks (t=0 to t= 1): Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. A market-value-weighted index. b. An equally weighted index. 22 % %
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. Stock A B С PO 80 85 35 20 275 650 950 a. Rate of return b. New divisor c. Rate of return P1 85 80 50 01 275 650 950 % P₂ Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Calculate the new divisor for the price-weighted index in year 2. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. Calculate the rate of return for the second period (t=1 to t=2). Note: Round your answer to 2 decimal places. % 85 80 25 02 275 650 1,900
Consider the three stocks in the following table. P, represents the price at time t, and Q, represents the total shares outstanding at time t. Calculate the rate of return on a price-weighted index of three stocks for the first period (t=0 to t=1). Table 2: Data for Q4 & Q5 Q0 P1 Q1 PO 100 50 105 50 A B 200 100 210 100 C 300 100 250 100
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. A B с Po 81 41 82 Rate of return 20 100 200 200 Divisor P1₁ 86 36 92 21 100 200 200 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) % P2 86 36 46 Q2 100 200 400 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Consider the three stocks in the following table. P+ represents price at time t, and ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B с Po 83 43 86 Rate of return Divisor lo 100 200 200 Rate of return L P1 88 38 96 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2.35 4.71% …….... 01 100 200 200 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) P₂ 88 38 48 % 2₂ 100 200 400 c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t=2).

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