Using the data in Problem 4, suppose you are holding a market portfolio and have invested $46,000

Question:

Using the data in Problem 4, suppose you are holding a market portfolio and have invested $46,000 in Stock C.

a. How much have you invested in Stock A?

b. How many shares of Stock B do you hold?

c. If the price of Stock C suddenly drops to $5 per share, what trades would you need to make to maintain a market portfolio?

Problem 4

Suppose all possible investment opportunities in the world are limited to the five stocks listed in the table below. What does the market portfolio consist of (what are the portfolio weights)?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Feb 29, 2024 04:01 AM

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Using the data in Problem 4, suppose you are holding a market portfolio and have invested $46,000

Question:

Stock ABCDE Price/Share ($) 8 17 7 43 48 Number of Shares Outstanding (millions) 10 12 3 1 20

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Corporate Finance The Core

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