Question
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. There are three
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. There are three time points 0, 1, and 2.
| P0 | Q0 | P1 | Q1 | P2 | Q2 |
A | 90 | 100 | 95 | 100 | 100 | 100 |
B | 50 | 200 | 45 | 200 | 45 | 200 |
C | 100 | 200 | 110 | 200 | 105 | 200 |
|
Form an equally weighted portfolio in stocks A, B, C at time 0 and hold it to time 1.
Calculate the portfolio return from 0 to 1. Keep two decimal places.
Form an equally weighted portfolio in stocks B, C (No Stock A) at time 1 and hold it to time 2.
Calculate the portfolio return from 1 to 2. Keep two decimal places.
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