Question
QUESTION ONE You construct a portfolio of 3000 shares of company A at K10 per share and 500 shares of company B at K40 per
QUESTION ONE You construct a portfolio of 3000 shares of company A at K10 per share and 500 shares of company B at K40 per share. Company As share price experiences a capital gain of K15 per share and company B a capital loss of K5 per share. There was no dividend payment for both companies. A. What is the new value in Kwacha of the portfolio? B. Compute your return on investment in Kwacha. C. Calculate the individual weights of company A if you have a target portfolio return of 72%. D. The correlation coefficient between the two shares is negative. What does this imply regarding the relationship between the two shares?
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