Question

In: Finance

You own three​ stocks: 600600 shares of Apple​ Computer, 10 comma 00010,000 shares of Cisco​ Systems,...

You own three​ stocks:

600600

shares of Apple​ Computer,

10 comma 00010,000

shares of Cisco​ Systems, and

5 comma 0005,000

shares of​ Colgate-Palmolive. The current share prices and expected returns of​ Apple, Cisco, and​ Colgate-Palmolive are,​ respectively,

$ 500$500​,

$ 20$20​,

$ 100$100

and

12 %12%​,

10 %10%​,

8 %8%.

a. What are the portfolio weights of the three stocks in your​ portfolio?

b. What is the expected return of your​ portfolio?

c. Suppose the price of Apple stock goes up by

$ 25$25​,

Cisco rises by

$ 5$5​,

and​ Colgate-Palmolive falls by

$ 13$13.

What are the new portfolio​ weights?

d. Assuming the​ stocks' expected returns remain the​ same, what is the expected return of the portfolio at the new​ prices?

a. What are the portfolio weights of the three stocks in your​ portfolio?

The portfolio weight of Apple Computer is

nothing​%.

​ (Round to two decimal​ places.)The portfolio weight of Cisco Systems is

nothing​%.

​ (Round to two decimal​ places.)The portfolio weight of​ Colgate-Palmolive is

nothing​%.

​ (Round to two decimal​ places.)

b. What is the expected return of your​ portfolio?

The expected return on the portfolio is

nothing​%.

​ (Round to two decimal​ places.)c. Suppose the price of Apple stock goes up by

$ 25$25​,

Cisco rises by

$ 5$5​,

and​ Colgate-Palmolive falls by

$ 13$13.

What are the new portfolio​ weights?The new portfolio weight of Apple is

nothing​%.

​(Round to two decimal​ places.)The new portfolio weight of Cisco is

nothing​%.

​ (Round to two decimal​ places.)The new portfolio weight of​ Colgate-Palmolive is

nothing​%.

​ (Round to two decimal​ places.)

d. Assuming the​ stocks' expected returns remain the​ same, what is the expected return of the portfolio at the new                  

​prices?

The new expected return is

nothing​%.

​ (Round to two decimal​ places.)

Enter your answer in each of the answer boxes.

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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