a. Calculate the initial value of the index if a value-weighting scheme is used. (Round your answer to 2 decimal places.) b. What is the rate of return on this index for the year ending December 31, 2019? For the year ending December 31, 2020? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a
| Price | ||||||||||
| Shares (millions) |
1/1/19 | 1/1/20 | 1/1/21 | |||||||
| Douglas McDonnell | 210 | $ | 94 | $ | 97 | $ | 111 | |||
| Dynamics General | 450 | 36 | 31 | 45 | ||||||
| International Rockwell | 350 | 65 | 54 | 68 | ||||||
a. Calculate the initial value of the index if a value-weighting scheme is used. (Round your answer to 2 decimal places.)
b. What is the
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