Rate of return on a price-weighted index of the three stocks

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Reference no: EM131878614

Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t.

P0 Q0 P1 Q1

A 90 300 100 300

B 50 200 40 200

C 100 200 112 200

a. Calculate the rate of return on a price-weighted index of the three stocks for the period t=0 to t=1.

b. Calculate the rate of return on a market value-weighted index of the three stocks for the period t=0 to t=1.

Reference no: EM131878614

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