The table below reports the closing market prices (P) and shares outstanding (SO) for two stocks: ABC and XYZ. Note that stock XYZ has a 3 for 1 stock split which may, or may not, impact index construction. What divisor would we use in constructing the Price-Weighted Index at time period 1?
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Period(1-3)
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ABC
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XYZ
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P
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SO
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P
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SO
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1
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45.00
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110
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112.00
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300
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2
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47.00
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110
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119.00
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300
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3
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49.00
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110
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41.33
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900
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a) .7156
b) 1.0833
c) 1.6930
d) 2.0000