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. A B C с P2 Po 20 P1 21 110 500 115 500 115 90 600 85 80 600 100 22 500 600 600 85 600 50 1,200 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 ✓ Answer is complete and correct. % 7.15
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. A B C с P2 Po 20 P1 21 110 500 115 500 115 90 600 85 80 600 100 22 500 600 600 85 600 50 1,200 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 ✓ Answer is complete and correct. % 7.15
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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cant get question C
Transcribed Image Text: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.
A
B
с
PO
110
20 P1
500 115
600 85
80 600 100 600
21 P2
500 115
85
90
600
50
22
500
600
1,200
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.)
Answer is complete and correct.
7.15 %
Rate of return
Transcribed Image Text:b. Calculate the new divisor for the price-weighted index in year 2. (Do not round intermediate calculations. Round your answ
decimal places.)
New divisor
Answer is complete and correct.
2.49
c. Calculate the rate of return for the second period (t = 1 to t = 2). (Round your answer to 2 decimal places.)
Answer is complete but not entirely correct.
(16.70) %
Rate of return
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