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You are asked to form a portfolio of $5 million to replicate the performance of a price-weighted index of two stocks, ABC and XYZ. The

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You are asked to form a portfolio of $5 million to replicate the performance of a price-weighted index of two stocks, ABC and XYZ. The information about these two stocks are as follows. Prices at Different Times Assets Total Shares Outstanding 0 1 2 ABC 75 81 87 200,000,000 100,000,000 XYZ 25 28 29 How many shares of ABC do you need to purchase at time 0? At time 0, you are asked to form a portfolio of $1,000,000 to replicate the performance of a value- weighted index of two stocks, ABC and XYZ. The information about these two stocks are as follows. Prices at Different Times Assets Total Shares Outstanding o 1 2 ABC 200,000,000 75 90 87 XYZ 100,000,000 50 61 56 What would be the value value of your portfolio at time 1 ? At time 0, you are asked to form a portfolio of $1,000,000 million to composed of two stocks, ABC and XYZ. The information about these two stocks are as follows. Prices at Different Times Assets Total Shares Outstanding 0 1 2 ABC 75 90 87 200,000,000 100,000,000 XYZ 50 54 56 Which of the following portfolio would give you the greatest value at time 1? An equally-weighted portfolio Insufficient information is available for a definite answer A price-weighted portfolio A value-weighted portfolio

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