You own three stocks:

1 comma 000

shares of Apple Computer,

10 comma 000

shares of Cisco Systems, and

5 comma 000

shares of Goldman Sachs. The current share prices and expected returns of Apple, Cisco, and Goldman Sachs are, respectively,

$ 136

,

$ 22

,

$ 122

and

12 %

,

10 %

,

10.5 %

.

a. What are the portfolio weights of the three stocks in your portfolio?

b. What is the expected return of your portfolio?

c. Suppose the price of Apple stock goes up by

$ 5

,

Cisco rises by

$ 3

,

and Goldman Sachs falls by

$ 9

.

What are the new portfolio weights?

d. Assuming the stocks' expected returns remain the same, what is the expected return of the portfolio at the new prices?