1.You own three stocks: 600 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5000 shares of Colgate-Palmolive. The current share prices and expected returns of Apple, Cisco, and Colgate-Palmolive are, respectively, $511, $16, $97 and 12%, 10%, 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 $27, Cisco rises by $5, and Colgate-Palmolive falls by $10. 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?