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Could you please show work? Thank you! On the first trading day of January 2016 you bought two round lots' of three round lots of
Could you please show work? Thank you!
On the first trading day of January 2016 you bought two round lots' of three round lots of MSFT, one round lot of AMZN, four round lots of DIS, and seven round lots of LQ. You liquidated your entire portfolio on July 23, 2018. Assume that both and transactions costs for this problem. s closing prices. Ignore both dividends [al How much did your portfolio cost you?2 [b] How much did you realize when you liquidated your portfolio? el What is the [un-annualized] percentage return, R,, you realized on your portfolio? lel What is the (un-annualized] percentage return you realized on each of the five securities in your portfolio? Il Work out the fraction of your portfolio that was invested in each of the five securities when you formed the portfolio, and confirm that Each round lot is a 100 shares. You can find this out by first determining what the first trading day was in January 2016 and then by looking up the historical prices on http://www.bigcharts.com/historical/ or on http://chart.yahoo.comi? Remember to take stock splits into account. For instance, when a stock splits 2:1, the number of shares you hold doubles. In general, here is what happens in a split Split Factor BEFORE SPLIT AFTER SPLIT Market Number of shares Price Price Number of Market zation i outstanding 161- zation 1shares outstanding131 111*12 41-13 n 2 n-4 n-025, 1:4 split $100 1,000,000 $100,000,000 S100,000,000 2,000,000 S100 1,000,000 S100,000,000 S100,000,000 4,000,000 $50 S25 $400 S100 1,000,000 100,000,000 S100,000,000 250,000 $ Split is an accounting entry that leaves the market value of the equity falso known as Market Capitalization] unaffected. In the table above, the blue bold font gives the column number, and the red bold font shows how the value of cells in each column is computed. Each row demonstrates a different lit. As column 101 outlines, the 3 splits that are demonstrated are 2:1, 4:1, and a reverse split of 1:4. Thus, uppose in June 2006 the price of a given stock was $100, and the number of shares outstanding were 1,000,000, then the Market Capitalization of the firm was $100 million. Since split leaves the Market Capitalization unaffected, we start the after split calculations by setting column 14] equal to column 13 The split factor tells us how many new shares outstanding there are going to be for each old share. Th 2:1 split will result in twice as many shares outstanding after the split as before. Since we started with 1,000,000 shares, this means that after the split, there will be 2,000,000 shares outstanding. If the Market Capitalization is to remain at S100 million, the split-adjusted price will be $50. In other words, the split adjusted price is arrived at by dividing the Market Capitalization by the new number of shares outstanding Step by Step Solution
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