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You own three stocks: 600 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5,000 shares of Colgate-Palmolive. The current share prices and
You own three stocks: 600 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5,000 shares of Colgate-Palmolive. The current share prices and expected returns of Apple, Cisco, and Colgate-Palmolive are, respectively, $456, $21, $99 and 12%, 10%, 8%. 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 $22, Cisco rises by $6, and Colgate-Palmolive falls by $13. 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? a. What are the portfolio weights of the three stocks in your portfolio? The portfolio weight of Apple Computer is 28 % (Round to two decimal places.) The portfolio weight of Cisco Systems is 22%. (Round to two decimal places.)
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