Question
Its a 3 part question. Check my work for a, b and I need help with C. You have $200 to create an investment portfolio.
Its a 3 part question. Check my work for a, b and I need help with C.
You have $200 to create an investment portfolio. You buy one share of Stock A for $100 and one share of Stock B for $100. Assume you hold the stocks for 100 days, calculate the following.
a) Calculate the total return percentage for each stock using the formula (End Price - Start Price)/Start Price
Stock A start price: $100
Stock A end price: $50
Stock A returns: ($50-$100)/$100 = -0.50 = -50%
Stock B start price: $100
Stock B end price: $75
Stock B returns: ($75-100)/$100 = -0.25 = -25%
b) Calculate the annual return percentage for each stock using the formula (Total Returns/Days held) * 365
Stock A annual: (-50%/100days)*365 = -182.5%
Stock B annual: (-25%/100days)*365 = -91.3%
c) Calculate the annualized return percentage of the portfolio using an equal weighting for Stock A and Stock B
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