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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.

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Expert Solution

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

jeff jeffy answered 1 year ago

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

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