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You own three stocks: 1,000 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5,000 shares of Goldman Sachs. The current share prices and
You own three stocks: 1,000 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5,000 shares of Goldman Sachs. The current share prices and expected returns of Apple, Cisco, and Goldman Sachs are, respectively, $184, $15, $123 and 12%, 10%, 10.5%. a. What are the portfolio weights of the three stocks in your portfolio? The portfolio weight of Apple Computer is %. (Round to one decimal place.) The portfolio weight of Cisco Systems is %. (Round to one decimal place.) The portfolio weight of Goldman Sachs is %. (Round to one decimal place.) b. What is the expected return of your portfolio? The expected return of the portfolio is %. (Round to two decimal places.) C. Suppose the price of Apple stock goes up by $8, Cisco rises by $4, and Goldman Sachs falls by $11. What are the new portfolio weights? The new portfolio weight of Apple is %. (Round to one decimal place.) The new portfolio weight of Cisco is %. (Round to one decimal place.) The new portfolio weight of Goldman Sachs is %. (Round to one decimal place.) d. Assuming the stocks' expected returns remain the same, what is the expected return of the portfolio at the new prices? The new expected return is %. (Round to two decimal places.)
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