Hello,

I have a question on this exercice

I do not understand where the calculations are coming from for any of the questions, I don't understand the solution, could you help me please ?

View an example | 1 part remaining Suppose you are holding the market portfolio shown in the table, and have invested $22,000 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 $3 per share, what trade in Stock C do you need to execute to maintain your portfolio at the same proportions as the market portfolio? a. How much have you invested in Stock A? The amount that you have invested in Stock A is: Price of Stock AxShares outstanding Stock A Investment in Stock A = Investment in Stock CX Price of Stock Cx Shares outstanding Stock C $8 per share x 8 million shares Investment in Stock A = $22,000 X = $117,333 $6 per share x 2 million shares b. How many shares of Stock B do you hold? The number of shares that you hold in Stock C is: Investment in Stock C Shares in Stock C= Price of Stock C $22,000 Shares in Stock C= = 3,667 shares $6 per share The number of shares that you hold in Stock B is: View an example | All parts showing Suppose you are holding the market portfolio shown in the table, and have invested $22,000 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 $3 per share, what trade in Stock C do you need to execute to maintain your portfolio at the same proportions as the market portfolio? b. How many shares of Stock B do you hold? The number of shares that you hold in Stock C is: Investment in Stock C Shares in Stock C= Price of Stock C $22,000 Shares in Stock C= = 3,667 shares $6 per share The number of shares that you hold in Stock B is: Shares outstanding Stock B Shares in Stock B = Shares in Stock CX Shares outstanding Stock C 11 million shares Shares in Stock B = 3,667 shares x = 20,169 shares 2 million shares c. If the price of Stock C suddenly drops to $3 per share, what trade in Stock C do you need to execute to maintain your portfolio at the same proportions as the market portfolio? No trades needed, it is a passive portfolio. Grapher Print Close et more help