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Your portfolio consists of 80 shares of CSH and 60 shares of EJH, which you just

ID: 2621169 • Letter: Y

Question

Your portfolio consists of 80 shares of CSH and 60 shares of EJH, which you just bought at $18 and $29 per share, respectively. a. What fraction of your portfolio is invested in CSH? In EJH? b. If CSH increases to $20 and EJH decreases to $27, what is the return on your portfolio? a. What fraction of your portfolio is invested in CSH? In EJH? The fraction invested in CSH is .96. (Round to one decimal place.) The fraction invested in EJHis %. (Round to one decimal place.) b. If CSH increases to $20 and EJH decreases to $27, what is the return on your portfolio? The return on the portfolio is %. (Round to one decimal place.)

Explanation / Answer


a.

Particulars

Qty

Price

Qty x Price

Fraction

CSH

80

18

1440

45.3%

EJH

60

29

1740

54.7%

Total A

3180

CSH fraction investment = 1440/3180 = 45.3%

EJH fraction investment = 1740/3180 = 54.7%

b.

Revised table

Particulars

Qty

Price

Qty x Price

Fraction

CSH

80

20

1600

0.496894

EJH

60

27

1620

0.503106

Total B

3220

Return on portfolio = (Total B - Total A)/Total A = (3220-3180)/3180

Return on portfolio = 1.26%

Particulars

Qty

Price

Qty x Price

Fraction

CSH

80

18

1440

45.3%

EJH

60

29

1740

54.7%

Total A

3180