Question

Your portfolio consists of 100 shares of CSH and 50 shares of? EJH, which you just bought at $ 20 and $ 30 per? share, respectively. a. What fraction of your portfolio is invested in? CSH? In? EJH? b. If CSH increases to $ 21 and EJH decreases to $ 25?, what is the return on your? portfolio? a. What fraction of your portfolio is invested in? CSH? In? EJH? The fraction invested in CSH is nothing?%. ?(Round to one decimal? place.) The fraction invested in EJH is nothing?%. ?(Round to one decimal? place.) b. If CSH increases to $ 21 and EJH decreases to $ 25?, what is the return on your? portfolio? The return on the portfolio is nothing?%

Answer 1

a) Amount invested in CSH = 100 shares x $20 per share = $2000

Amount invested in EJH = 50 shares x $30 per share = $1500

Total amount invested = $2000 + $1500 = $3500

Fraction invested in CSH = ($2000 / $3500) x 100 = 57.1%

Fraction invested in EJH = ($1500 / $3500) x 100 = 42.9%

b) Return on CSH = ($21 - $20) x 100 = $100

Return on EJH = ($25 - $30) x 50 = (-)$250

Total return = $100 - $250 = (-)$150

Return on portfolio as % = [ Total return / Amount invested ] x 100 = [ (-)$150 / $3500 ] x 100 = (-)4.285714% or (-)4.3%