Purchase Solution

Calculate the portfolio weights and expected return

Not what you're looking for?

Ask Custom Question

Financial Calculations: Portfolio Weights and Expected Return

You own a portfolio of 250 shares of firm A worth $60/share and 1500 shares of firm B worth $40/share. You expect a return of 4% for stock A and a return of 9% for stock B. Please provide the calculations for the given problems in an Excel spreadsheet.

(a) What are the portfolio weights and what is the expected return?

(b) Suppose firm A's share price falls to $48 and firm B's share price goes up to $44. What are the portfolio weights and what is the expected return in the changed scenario.

Purchase this Solution

Solution Summary

This solution depicts the steps required to estimate the portfolio weights and expected portfolio return. Solution are given in an Excel file.

Solution Preview

Problem: You own a portfolio of 250 shares of firm A worth $60/share and 1500 shares of firm B worth $40/share. You expect a return of 4% for stock A and a return of 9% for stock B.

*See attached Excel sheet for calculations

(a) What are the portfolio weights and what is the expected return?

Number of shares of firm A=Na= 250
Price of a ...

Solution provided by:
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution


Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Operations Management

This quiz tests a student's knowledge about Operations Management