Question
1. You are considering how to invest part of your retirement savings.You have decided to put $200,000 into three stocks: 50% of the money in
1. You are considering how to invest part of your retirement savings.You have decided to put $200,000 into three stocks: 50% of the money in GoldFinger (currently $18/share), 25% of the money in Moosehead (currently $78/share), and the remainder in Venture Associates (currently $8/share). If GoldFinger stock goes up to $37/share, Moosehead stock drops to $63/share, and Venture Associates stock rises to $9 per share.
a. What is the new value of the portfolio? (Round to the nearest integer.)
b. What return did the portfolio earn?
c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
