Consider the three stocks in the following table. Pe represents price at time t, and 0 represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Po 98 58 116 Rate of return Divisor %0 100 200 53 200 126 P₁ 103 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 f= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) % 01 100 200 200 P2 103 53 63 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.) 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. Pe represents price at time t, and 0 represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Po 98 58 116 Rate of return Divisor %0 100 200 53 200 126 P₁ 103 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 f= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) % 01 100 200 200 P2 103 53 63 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.) 92 100 200 400 % c. Calculate the rate of return of the price-weighted index for the second period (t-1 to t=2).
Chapter5: Exponential And Logarithmic Functions
Section: Chapter Questions
Problem 37CT: On the day a grandchild is born, a grandparent deposits $2500 in a fund earning 7.5% interest,...
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