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Question 1:
Score 1/1
Your response
Correct response
Determining Portfolio Weights
A portfolio has 65 shares of Stock A that sell for $73 per share and 120 shares of Stock B that sell for $62 per
share. The weight of A is
.3894
(50%) and the weight of B is
.6105
(50%).
(Round your answers to 4 decimal
places.)
Determining Portfolio Weights
A portfolio has 65 shares of Stock A that sell for $73 per share and 120 shares of Stock B that sell
share. The weight of A is
.3894
and the weight of B is
.6105
.
(Round your answers to 4 decimal pl
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 = 65($73) + 120($62)
Total value = $12,185
The portfolio weight for each stock is:
WeightA = 65($73)/$12,185
WeightA = 0.3894
WeightB = 120($62)/$12,185
WeightB = 0.6106
Question 2:
Score 1/1
Your response
Correct response
Portfolio Expected Return
You own a portfolio that has $1,800 invested in Stock A and $1,800 invested in Stock B. If the expected returns on
these stocks are 9 percent and 13 percent, respectively, the expected return on the portfolio is
11
(100%) percent.
(Input answer as a percent rounded to 2 decimal places, without the percent sign.)
Portfolio Expected Return
You own a portfolio that has $1,800 invested in Stock A and $1,800 invested in Stock B. If the expecte
these stocks are 9 percent and 13 percent, respectively, the expected return on the portfolio is
11
per
answer as a percent rounded to 2 decimal places, without the percent sign.)
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 = $1,800 + 1,800
Total value = $3,600
So, the expected return of this portfolio is:
E(Rp) = ($1,800/$3,600)(0.09) + ($1,800/$3,600)(0.13)
E(Rp) = 0.11 or 11%
Question 3:
Score 1/1
Your response
Correct response
Portfolio Expected Return
You own a portfolio that is 50 percent invested in Stock X, 38 percent in Stock Y, and 12 percent in Stock Z. The
expected returns on these three stocks are 17 percent, 11 percent, and 19 percent, respectively. The expected
return on the portfolio is
15
(100%) percent.
(Input answer as a percent rounded to 2 decimal places, without
the percent sign.)
Portfolio Expected Return
You own a portfolio that is 50 percent invested in Stock X, 38 percent in Stock Y, and 12 percent in S
expected returns on these three stocks are 17 percent, 11 percent, and 19 percent, respectively. Th
return on the portfolio is
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 Spring '07
 ANDELIN,STEVENLE
 Corporate Finance

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