Here is the provided answer key for a problem I am attempting to understand: 
I believe there is an error in this answer. Are the HPR (holding period return) for each component stock wrong or is the index value wrong in this example? This can be explained whether the Day3 holding period return (circled in blue), should be calculated as: 1.) =1+((day3-Day1)/Day1) =1+((60-60)/60) = 1 …(this method will eventually lead to the red index of 99.13386 and the numbers below) …or… 2.) =1+(day3-Day2)/Day1) =1 +((60-63/60) = .95 …(which means index value for day 3 should be 93.45 as opposed to 99.13386) Can anyone clarify? Thanks so much, this should be my last post on market index’s for what its worth.
I believe you should use a new book. This is a summary of the CFA material on calculating indexes. The example you show is calculating an geometric mean of the HPR’s
http://www.investopedia.com/exam-guide/cfa-level-1/securities-markets/computing-indexes.asp
Thanks for that link and responding again, I read it and understand everything. Humor me and assume we add a third column to this: (…assume current cost is renamed: period 2) 
Period 3: A- 1.15 B- 1.10 C- 1.20 D- 1.45 Which would be the correct solution? Solution 1: 1+((1.15-1/1) = 1.15 1+((1.10-1)/1) = 1.1 1+((1.2-1)/1) = 1.2 1+((1.45-1)/1) = 1.45 (1.15*1.1*1.2*1.45)^(.25)= 1.218 —or---- Solution 2: 1+((1.15-1.1/1) = 1.05 1+((1.10-1.25)/1) = .85 1+((1.2-1)/1) = 1.2 1+((1.45-1.3/1)= 1.15 (1.05*.85*1.2*1.15)^(.25)=1.053