You own three stocks 600 shares of Apple Computer, 10 comma000 shares...

You own threeâ€‹ stocks: 600 shares of Appleâ€‹ Computer, 10 comma 000 shares of Ciscoâ€‹ Systems,...

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Finance

You own threeâ€‹ stocks: 600 shares of Appleâ€‹ Computer, 10 comma000 shares of Ciscoâ€‹ Systems, and 5 comma 000 shares ofâ€‹Colgate-Palmolive. The current share prices and expected returnsofâ€‹ Apple, Cisco, andâ€‹ Colgate-Palmolive are,â€‹ respectively, $537â€‹, $ 24â€‹, $ 93 and 12 %â€‹, 10 %â€‹, 8 %. a. What are the portfolioweights of the three stocks in yourâ€‹ portfolio? b. What is theexpected return of yourâ€‹ portfolio? c. Suppose the price of Applestock goes up by $ 24â€‹, Cisco rises by $ 4â€‹, andâ€‹ Colgate-Palmolivefalls by $ 13. What are the new portfolioâ€‹ weights? d. Assumingtheâ€‹ stocks' expected returns remain theâ€‹ same, what is theexpected return of the portfolio at the newâ€‹ prices?

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3.7 Ratings (701 Votes)

No of Shares Share Price Expected Return Apple Computer 600 537 12 Cisco System 10000 24 10 Colgate Palmolive 5000 93 8 a The above data is provided We will first calculate the total value of od individual stocks in the portfolio Value of stock No of sharesShare Price Value of Apple computer shares 600537 322200 Value of Cisco Systems shares 1000024 240000 Value of ColgatePalmolive shares 500093 465000 Total value of the portfolio Value of Apple computer shares Value of Cisco Systems shares Value of ColgatePalmolive shares See Answer

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