Question

Your portfolio consists of 150 shares of CSH and 100 shares of EJH, which you just bought at $35 and $30 per share, respectively. a. What fraction of your portfolio is invested in CSH? In EJH? b. If CSH increases to $39 and EJH decreases to $28, what is the return on your portfolio? a. The fraction of the portfolio invested in CSH is 63.6% and the fraction of the portfolio invested in EJH is 36.4 %. (Round to one decimal place.) b. The return is 4.85 %. (Round to one decimal place.)
1 Hi, can you check these answers? Thank you!

Answer 1

All Answers are correct.

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

C D E F G H - Portfolio Units Purchase Purchase price value Weight Price at end of period Value at End L CSH ЕЈН 150 100 $35.00 $30.00 $5,250.00 $3,000.00 63.6% 36.4% $39.00 $28.00 $5,850.00 $2,800.00 Fraction of Portfolio invested in CSH Fraction of Portfolio invested in EJH 63.6% 36.4% 9 b. Return 4.85% 11 12 2 13 Open price Open price Close Price Total dividend 9.85 10.85 0.76 14 Realize return 17.9%

Cell reference -

D2J F G H Portfolio Units Purchase price Purchase value Value at End 1 2 3 Price at Weight end of period =E3/SUM($E$3:$E$4) 39 =E4/SUM($E$3:$E$4) 28 150 CSH EJH 35 30 =C3*D3 =C4*D4 =C3*G3 =C4*G4 100 6a. Fraction of Portfolio invested in CSH =F3 Fraction of Portfolio invested in EJH =F4 9 b. Return =SUM(H3:H4)/SUM(E3:E4)-1 11 12 2 9.85 13 Open price Close Price Total dividend 10.85 =0.19*4 14 15 16 Realize return =((C13-C12)+C14)/012

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.