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    Portfolio Questions

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    Attached is an excel sheet on a portfolio.

    What is the current yield on the equities portfolio?
    a. 2.02 b. 2.03 c. 2.06 d. 2.86
    CY = annual income / price
    I tabulated Annual Inc/Share = 5.145
    I then divided by the price of all equities = 69.9.
    5.145/69.9 = .073 - Way off of the list of answers. Please advise.
    Do I need to take the annual income * shares / divide by the FMV = .042?

    What is the weighted geometric average return of the equities in portfolio?
    a. -1.4 b. 3.22 c. 3.71 d. 4.22 e. 7.61
    I need to take the square root of the 2011 returns
    √(1-[-.05])(1+[-.06])(1+[.01])(1+.03)(1+.02) = .9529 - once again, not close to answers. Please advise.

    What is the weighted beta of portfolio?
    Add FMV = 134000
    Divide individual Cost Basis by 134000
    Mult those answers by beta
    Add those figures = 1.08

    Find Treynor performance measure index and rank from highest to lowest. (Using the geometric average return over the 5 year period.)
    What I am unable to calculate is the geometric average over the 5-yr period. Please advise.
    From there, T = r(p)-r(free)/Beta
    Wouldn't Risk free rate be .0006? - 3month t-bill?

    What is the YTM of the Texas Instruments Bond?
    P = pmt/(1+i)^n
    I need to find the payment. I don't know how to do that. From there, I think I can find it. Is this correct?

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    Below is your tutorial.
    Note that I reformatted the Excel file for easier computation. I highlighted the cells I changed with GREY.

    Question 1. What is the current yield on the equities portfolio?
    2.02 b. 2.03 c. 2.06 d. 2.86
    Current yield = Annual income/Current price
    Since we are computing for the current yield of the equities portfolio, we replace annual income per share with Total Annual Income for the entire portfolio which I computed and highlighted with YELLOW in the Excel file. The current price is to be replaced by the portfolio's fair market value
    Given this the formula for the current yield is
    CY = $5,667/$134,000 = 4.23%

    Now, may I ask where you got the data - FMV and Annual Income Per Share - from?
    I checked the price of the stocks at the end of December 31, 2011 and the values in the FMV are not the market values of these stocks at the end of 2011. For example, on December 31, 2011 Boeing has a market price per share of $70.80 which translates to an FMV of $28,320 for 400 shares

    Please verify your input data. If FMV are different, you only need to change these figures and the current yield, highlighted in ORANGE, ...

    Solution Summary

    The current yield on the equities portfolio are analyzed.

    $2.19