Question

At the beginning of the month, you owned $6,900 of Company G, $9,400 of Company S,...

At the beginning of the month, you owned $6,900 of Company G, $9,400 of Company S, and $3,800 of Company N. The monthly returns for Company G, Company S, and Company N were 8.65 percent, -1.64 percent, and -.09 percent. What is your portfolio return?

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Answer #1

The ending value = The beginning value * (1 + rate of return)

The ending value of Company G = 6,900 * (1 + 0.0865)

The ending value of Company G = $7,496.85

The ending value of Company S = 9,400 * (1 - 0.0164)

The ending value of Company S = 9,245.84

The ending value of Company N = 3,800 * (1 - 0.0009)

The ending value of Company N = $3,796.58

The beginning value of the portfolio = 6,900 + 9,400 + 3,800 = $20,100

The ending value of the portfolio = 7,496.85 + 9,245.84 + 3,796.58 = $20,539.27

Portfolio return over one month = 20,539.27/20,100 - 1

Portfolio return over one month = 1.0218542289 - 1

Portfolio return over one month = 0.0218542289

Portfolio return over one month = 2.18542289%

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