Question
You are considering how to invest part of your retirement savings.You have decided to put $500,000 into threestocks: 64% of the money in GoldFinger(currently $25/share),
You are considering how to invest part of your retirement savings.You have decided to put $500,000 into threestocks:
64% of the money in GoldFinger(currently $25/share), 16% of the money in Moosehead(currently $70/share), and the remainder in Venture Associates(currently $7/share). Suppose GoldFinger stock goes up to $33/share, Moosehead stock drops to $62/share, and Venture Associates stock rises to $17 per share.
a. What is the new value of theportfolio?
b. What return did the portfolioearn?
c. If youdon't buy or sell any shares after the pricechange, what are your new portfolioweights?
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Fundamentals of Corporate Finance
Authors: Berk, DeMarzo, Harford
2nd edition
132148234, 978-0132148238
