e Test: FIN 344-Final Exam est Information cription tructions Test This test has
ID: 2804099 • Letter: E
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e Test: FIN 344-Final Exam est Information cription tructions Test This test has a time limit of 2 hours and 5 minutes This test will save and submit automatically when the time e Wamings appear when half the time, 5 minutes, 1 minute, and 30 seconds remain. ed tiple Attempts Not allowed. This test can only be taken once. ce Completion Once started, this test must be completed in one sitting. Do not leave the test before clicking Save and Submit Remaining Time: 2 hours, 02 minutes, 56 seconds. Question Completion Status: Moving to another question will save this response tion 32 Use the table below with the number of shares and prices, compute for the three (3) stocks, the portfolio return (percentage)? Stock Share 100,000 150,000 100,000 Price $ 20 $ 30 $ 35 Beta 0.95 1.05 1.15 Return 10% 12% 14% > Moving to anoter question will save this response Several add-ons are ready for useExplanation / Answer
Stock A:
Number of shares = 100,000
Price = $20
Return = 10%
Value of Stock A = Number of shares * Price
Value of Stock A = 100,000 * $20
Value of Stock A = $2,000,000
Stock B:
Number of shares = 150,000
Price = $30
Return = 12%
Value of Stock B = Number of shares * Price
Value of Stock B = 150,000 * $30
Value of Stock B = $4,500,000
Stock C:
Number of shares = 100,000
Price = $35
Return = 14%
Value of Stock C = Number of shares * Price
Value of Stock C = 100,000 * $35
Value of Stock C = $3,500,000
Total Value of Portfolio = Value of Stock A + Value of Stock B + Value of Stock C
Total Value of Portfolio = $2,000,000 + $4,500,000 + $3,500,000
Total Value of Portfolio = $10,000,000
Weight of Stock A = $2,000,000 / $10,000,000
Weight of Stock A = 0.20
Weight of Stock B = $4,500,000 / $10,000,000
Weight of Stock B = 0.45
Weight of Stock C = $3,500,000 / $10,000,000
Weight of Stock C = 0.35
Portfolio Return = Weight of Stock A*Return on Stock A + Weight of Stock B*Return on Stock B + Weight of Stock C*Return on Stock C
Portfolio Return = 0.20 * 10% + 0.45 * 12% + 0.35 * 14%
Portfolio Return = 12.30%
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