Chap11 - Homework Manager - Corporate Finance FIN301-004

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Question 1: Score 0/1 Your response Correct response Determining Portfolio Weights A portfolio has 80 shares of Stock A that sell for $74 per share and 115 shares of Stock B that sell for $48 per share. The weight of A is 0 (0%) and the weight of B is 0 (0%). (Round your answers to 4 decimal places.) Determining Portfolio Weights A portfolio has 80 shares of Stock A that sell for $74 per share and 115 shares of Stock B that sell share. The weight of A is 0.5175 with a tolerance of ± 1.0% and the weight of B is 0.482 tolerance of ± 1.0% . (Round your answers to 4 decimal places.) Total grade: 0.0×1/2 + 0.0×1/2 = 0% + 0% Feedback: The portfolio weight of an asset is equal to the total investment in that asset divided by the total portfolio value. First, we will find the portfolio value, which is: Total value = 80($74) + 115($48) Total value = $11,440 The portfolio weight for each stock is: WeightA = 80($74)/$11,440 WeightA = 0.5175 WeightB = 115($48)/$11,440 WeightB = 0.4825 Question 2: Score 0/1 Your response Correct response Portfolio Expected Return You own a portfolio that has $1,600 invested in Stock A and $1,200 invested in Stock B. If the expected returns on these stocks are 11 percent and 10 percent, respectively, the expected return on the portfolio is 0 (0%) percent. (Input answer as a percent rounded to 2 decimal places, without the percent sign.) Portfolio Expected Return You own a portfolio that has $1,600 invested in Stock A and $1,200 invested in Stock B. If the expecte these stocks are 11 percent and 10 percent, respectively, the expected return on the 10.57 with a tolerance of ± 1.0% percent. (Input answer as a percent rounded to 2 decim without the percent sign.) Total grade: 0.0×1/1 = 0% Feedback: The expected return of a portfolio is the sum of the weight of each asset times the expected return of each asset. The total value of the portfolio is: Total value = $1,600 + 1,200 Total value = $2,800 So, the expected return of this portfolio is: E(Rp) = ($1,600/$2,800)(0.11) + ($1,200/$2,800)(0.1) E(Rp) = 0.1057 or 10.57% Question 3: Score 0/1 Your response Correct response Portfolio Expected Return You own a portfolio that is 42 percent invested in Stock X, 34 percent in Stock Y, and 24 percent in Stock Z. The expected returns on these three stocks are 20 percent, 20 percent, and 12 percent, respectively. The expected return on the portfolio is 0 (0%) percent. (Input answer as a percent rounded to 2 decimal places, without the percent sign.) Portfolio Expected Return You own a portfolio that is 42 percent invested in Stock X, 34 percent in Stock Y, and 24 percent in S
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Chap11 - Homework Manager - Corporate Finance FIN301-004

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