ou are considering how to invest part of your retirement savings.You have decided to put $600,000 into three stocks: 68% of the money in GoldFinger (currently $27/share), 22% of the money in Moosehead (currently $79/share), and the remainder in Venture Associates (currently $2/share). Suppose GoldFinger stock goes up to $31/share, Moosehead stock drops to $62/share, and Venture Associates stock rises to $13 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?

ou are considering how to invest part of your retirement savings.You have decided to put $600,000 into three stocks: 68% of the money in GoldFinger (currently $27/share), 22% of the money in Moosehead (currently $79/share), and the remainder in Venture Associates (currently $2/share). Suppose GoldFinger stock goes up to $31/share, Moosehead stock drops to $62/share, and Venture Associates stock rises to $13 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation

Section: Chapter Questions

Problem 9MC

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Question

You are considering how to invest part of your retirement savings.You have decided to put

$600,000

into three stocks:

68%

of the money in GoldFinger (currently

$27/share),

22%

of the money in Moosehead (currently

$79/share),

and the remainder in Venture Associates (currently

$2/share).

Suppose GoldFinger stock goes up to

$31/share,

Moosehead stock drops to

$62/share,

and Venture Associates stock

rises

$13

per share.

a. What is the new value of the portfolio?

b. What return did the portfolio earn?

c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?

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