Question

In: Finance

2) At end of Day 1, I invest equal amounts of money in shares of company...

2) At end of Day 1, I invest equal amounts of money in shares of company A and B.

By end of Day 2, the price of company A shares has doubled and the price of company B shares has halved (compared to Day 1 price).

  • What is the return on my entire investment from Day 1 to Day 2 ?
  • What are the weights of my portfolio at the end of Day 2 ?
  • At the end of Day 3, the price of company A shares has halved and the price of company B shares has quadrupled (compared to Day 2 price).

What is the return on my investment from end of Day 1 to end of Day 3 ?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 4 months ago
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