Suppose you are constructing a portfolio of two companies. The first has $10000 shares outstanding at a current price of $100 per share, while the second has $60,000 shares outstanding at a current price of $50 per share. You have $10,000 to invest. a) How many shares of each company would you buy if you want to construct an equally weighted portfolio? How many shares of each company would you buy if you construct a value-weighted portfolio? b) A year later, company 1's share price has risen to $150 while company 2's share price is unchanged at $50. Neither company has paid a dividend. What are the returns on the equal-weighted portfolio and the value-weighted portfolio you constructed in part a)? Explain the difference. c) How must you trade a year later to keep the equal weighted portfolio equal-weighted? How must you trade to keep the value- weighted portfolio value-weighted? Explain. (Note: It is sufficient to explain whether you need to buy or sell the shares of either company. You do not need to calculate the exact amounts.) d) Between price-weighted and value-weighted approaches, which method of constructing a stock index is preferred and why