Question

You own 100 share of commonwealth bank and 200 share of vrigin Australia. Would you portfolio...

You own 100 share of commonwealth bank and 200 share of vrigin Australia. Would you portfolio return be different if you instead own shares of Virgin Australia and 200 share of commonwealth bank. Why

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

YES, our portfolio return will be different because the weighting of the various share in the overall portfolio will be different so it is not about the presence of stock but it is also about the weighting of various stocks in the portfolio because overall return the portfolio will be determined by a level of diversification and level of Return.

Hence, In this case, we can say that OUR PORTFOLIO RETURN WILL BE DIFFERENT if I have had 200 shares of commonwealth Bank and 100 shares of virgin Australia so it would have helped us in order to get more exposed towards the return of commonwealth Bank, and it will determine our level of overall return in the portfolio differently because of presence of difference in weights of various stocks.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
3) Suppose you buy 100 shares of Scotia Bank at $85 per share, and 80 shares...
3) Suppose you buy 100 shares of Scotia Bank at $85 per share, and 80 shares of CIBC at $75 per share. If Scotia Bank’s stock goes up to $88.50 per share and CIBC's stock goes up to $77 per share, what is your portfolio return? A) 2% B) 0% C) 3.5% D) 3% E) 4.5%
You own 100 shares of Warna Paint’s stock, which currently sells for SAR120 a share. The...
You own 100 shares of Warna Paint’s stock, which currently sells for SAR120 a share. The company is contemplating a 2-for-1 stock split. Which of the following best describes what your position will be after such a split takes place? Select one: a. You will have 200 shares of stock, and the stock will trade at or near SAR120 a share. b. You will have 200 shares of stock, and the stock will trade at or near SAR60 a share....
You own a portfolio that has a total value of 131,000 dollars. The portfolio has 5,000...
You own a portfolio that has a total value of 131,000 dollars. The portfolio has 5,000 shares of stock A, which is priced at 8 dollars per share and has an expected return of 11.98 percent. The portfolio also has 20,000 shares of stock B, which has an expected return of 16.75 percent. The risk-free return is 5.26 percent and inflation is expected to be 2.42 percent. What is the risk premium for your portfolio? Answer as a rate in...
You own a portfolio that has a total value of 126,000 dollars. The portfolio has 6,000...
You own a portfolio that has a total value of 126,000 dollars. The portfolio has 6,000 shares of stock A, which is priced at 7.3 dollars per share and has an expected return of 8.62 percent. The portfolio also has 10,000 shares of stock B, which has an expected return of 14.46 percent. The risk-free return is 4.68 percent and inflation is expected to be 2.38 percent. What is the risk premium for your portfolio? Answer as a rate in...
You own the following portfolio of stocks. What is the portfolio weight of Stock C? Stock...
You own the following portfolio of stocks. What is the portfolio weight of Stock C? Stock Number of Shares Price per Share A 120 $ 25 B 610 $ 21 C 400 $ 45 D 200 $ 44
You own a portfolio that has 4,100 shares of stock A, which is priced at 17.1...
You own a portfolio that has 4,100 shares of stock A, which is priced at 17.1 dollars per share and has an expected return of 8.32 percent, and 3,700 shares of stock B, which is priced at 27.4 dollars per share and has an expected return of 12.13 percent. The risk-free return is 3.33 percent and inflation is expected to be 2.33 percent. What is the expected real return for your portfolio? Answer as a rate in decimal format so...
You own a portfolio that has 4,400 shares of stock A, which is priced at 13.8...
You own a portfolio that has 4,400 shares of stock A, which is priced at 13.8 dollars per share and has an expected return of 4.79 percent, and 3,300 shares of stock B, which is priced at 26.3 dollars per share and has an expected return of 16.86 percent. The risk-free return is 3.21 percent and inflation is expected to be 2.01 percent. What is the expected real return for your portfolio? Answer as a rate in decimal format so...
You own a portfolio that has 6,700 shares of stock A, which is priced at 18.1...
You own a portfolio that has 6,700 shares of stock A, which is priced at 18.1 dollars per share and has an expected return of 6.32 percent, and 1,800 shares of stock B, which is priced at 28.8 dollars per share and has an expected return of 16.35 percent. The risk-free return is 3.41 percent and inflation is expected to be 2.43 percent. What is the expected real return for your portfolio? Answer as a rate in decimal format so...
You own a portfolio that has 4,800 shares of stock A, which is priced at 15.4...
You own a portfolio that has 4,800 shares of stock A, which is priced at 15.4 dollars per share and has an expected return of 6.71 percent, and 3,800 shares of stock B, which is priced at 24.6 dollars per share and has an expected return of 16.07 percent. The risk-free return is 3.28 percent and inflation is expected to be 2.4 percent. What is the expected real return for your portfolio? Answer as a rate in decimal format so...
You own a portfolio that has 5,900 shares of stock A, which is priced at 15.2...
You own a portfolio that has 5,900 shares of stock A, which is priced at 15.2 dollars per share and has an expected return of 5.27 percent, and 1,000 shares of stock B, which is priced at 22.1 dollars per share and has an expected return of 14.19 percent. The risk-free return is 3.79 percent and inflation is expected to be 2.05 percent. What is the expected real return for your portfolio? Answer as a rate in decimal format so...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT