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Suppose all possible investment opportunities in the world are limited to the four stocks list in the table below: A)What is the weight on Taggart
Suppose all possible investment opportunities in the world are limited to the four stocks list in the table below: A)What is the weight on Taggart Transcontinental in the market portfolio? B) What is the weight on Wyatt Oil stock in the market portfolio? C) Suppose that you are holding a market portfolio and you have invested \$9,000 in Rearden Metal. How much have you invested in Nielson Motors? D) Suppose that you are holding a market portfolio and you have invested $9,000 in Rearden Metal. The amount that you have invested in Taggart Transcontinental is how much? E) Suppose that you have invested $30,000 invested in the market portfolio. Then how much do you have invested in Wyatt Oil? F) Suppose that you have invested $78,000 in the market portfolio. Then how many shares of Rearden Metal would you hold? G) Suppose that you have invested $100,000 invested in the market portfolio and that the stock price of Taggart Transcontinental suddenly drops to $7.80 per share. Which of the following trades would you need to make in order to maintain your investment in the market portfolio: 1. Buy approximately 1,140 shares of Taggart Transcontinental 2. Sell approximately 256 shares of Rearden Metal 3. Sell approximately 57 shares of Wyatt Oil 4. Sell approximately 148 shares of Nielson Motors i) 1 only ii) 2 only iii) 2,3 , and 4 only iv) 1,2,3, and 4 v) None of the above
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