Question
You are considering how to invest part of your retirement savings. You have decided to put $400,000into threestocks: 52%of the money in GoldFinger(currently$25/share),14%of the money
You are considering how to invest part of your retirement savings. You have decided to put $400,000into threestocks:
52%of the money in GoldFinger(currently$25/share),14%of the money in Moosehead(currently$98/share),and the remainder in Venture Associates(currently$3/share).Suppose GoldFinger stock goes up to $37/share,Moosehead stock drops to $55/share,and Venture Associates stock risesto $10per 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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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
