Consider the three stocks in the following table. P, represents price at time t and of represents shares outstanding at time & Stock C splits two-for-one in the last period. C Pe 86 46 92 o 100 200 200 PL 91 41 102 Rate of return 9₂ 100 200 200 P2 91 41 51 8₂ 100 200 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (-0 to f-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 27 (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 (-1 to r-2)
Consider the three stocks in the following table. P, represents price at time t and of represents shares outstanding at time & Stock C splits two-for-one in the last period. C Pe 86 46 92 o 100 200 200 PL 91 41 102 Rate of return 9₂ 100 200 200 P2 91 41 51 8₂ 100 200 400 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (-0 to f-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 27 (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 (-1 to r-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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Transcribed Image Text:18
Consider the three stocks in the following table. P represents price at time t, and o 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
le
100
Divisor
200
200
P₁
91
41
102
91
100
200
200
P2
91
41
51
Required:
a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (-0 to t=1). (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
2₂
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.)
c. Calculate the rate of return of the price-weighted index for the second period (t=1 to r-2)
Rate of return
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