You are considering how to invest part of your retirement savings. You have decided to put $500,000 into three stocks: 62% of the money in GoldFinger (currently $24/share), 22% of the money in Moosehead (currently $100/share), and the remainder in Venture Associates (currently $5/share). Suppose GoldFinger stock goes up to $39/share, Moosehead stock drops to $53/share, and Venture Associates stock rises to $9 per share. a What is the new value of the portfolio?

You are considering how to invest part of your retirement savings. You have decided to put $500,000 into three stocks: 62% of the money in GoldFinger (currently $24/share), 22% of the money in Moosehead (currently $100/share), and the remainder in Venture Associates (currently $5/share). Suppose GoldFinger stock goes up to $39/share, Moosehead stock drops to $53/share, and Venture Associates stock rises to $9 per share. a What is the new value of the portfolio?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You are considering how to invest part of your retirement savings. You have decided to put $600,000 into three stocks: 61% of the money in GoldFinger (currently $24/share), 12% of the money in Moosehead (currently $94/share), and the remainder in Venture Associates (currently $7/share). Suppose GoldFinger stock goes up to $30/share, Moosehead stock drops to $52/share, and Venture Associates stock drops to $2 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? a. What is the new value of the portfolio? The new value of the portfolio is $ 579218. (Round to the nearest dollar.)
You are considering how to invest part of your retirement savings.You have decided to put $ 500 comma 000 into three stocks: 55% of the money in GoldFinger (currently $ 16/share), 16% of the money in Moosehead (currently $ 89/share), and the remainder in Venture Associates (currently $ 4/ share). Suppose Gold Finger stock goes up to $35/share, Moosehead stock drops to $ 51/share, and Venture Associates stock rises to $9 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?
You are considering how to invest part of your retirement savings. You have decided to put $100,000 into three stocks: 57% of the money in GoldFinger (currently $27/share). 19% of the money in Moosehead (currently $78/share), and the remainder in Venture Associates (currently $9/share) Suppose GoldFinger stock goes up to $31/share, Moosehead stock drops to $55/share, and Venture Associates stock drops to $4 per share. a. What is the new value of the portfolio? b. What return did the portfolio eam? e if you don't buy or sell any shares after the price change, what are your new portfolio weights? a. What is the new value of the portfolio? The new value of the portfolio is $(Round to the nearest dollar)
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 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?
You are considering how to invest part of your retirement savings.You have decided to put$100,000 into three stocks: 55% of the money in GoldFinger (currently $24/share),23%of the money in Moosehead (currently$85/share),and the remainder in Venture Associates (currently $3/share).Suppose GoldFinger stock goes up to $33/share, Moosehead stock drops to $66/share, and Venture Associates stock rises to $5 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?
You are considering how to invest part of your retirement savings. You have decided to put $400,000 into three stocks: 64% of the money in GoldFinger (currently $23/share), 19% of the money in Moosehead (currently $83/share), and the remainder in Venture Associates (currently $8/share). Suppose GoldFinger stock goes up to $35/share, Moosehead stock drops to $50/share, and Venture Associates stock rises to $11 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? a. What is the new value of the portfolio? The new value of the portfolio is $ (Round to the nearest dollar.)
You are considering how to invest part of your retirement savings. You have decided to put $240,000into three stocks: 40% of the money in GoldFinger (currently $20/share), 25% of the money inMoosehead (currently $85/share), and the remainder in Venture Associates (currently$2/share). If GoldFinger stock goes up to $30/share, Moosehead stock drops to $60/share, andVenture Associates stock rises to $3 per share,i. What is the new value of the portfolio?ii. What return did the portfolio earn?iii. If you don’t buy or sell shares after the price change, what are your new portfolio weights?
You are considering how to invest part of your retirement savings. You have decided to put $100,000 into three stocks: 50% of the money in GoldFinger (currently $25/share), 25% of the money in Moosehead (currently $40/share), and the remainder in Venture Associates (currently $2/share). If GoldFinger stock goes up to $35/share, Moosehead stock drops to $20/share, and Venture Associates stock rises to $4 per share, What is the new value of the portfolio? What return did the portfolio earn? If you don’t buy or sell shares after the price change, what are your new portfolio weights?
You are considering buying some share in The Wayne Coporation as part of your retirement account. First, you want to calculate the expected return for Wayne Corp's stock to see if it meets your very high standards. You have estimateed the 3 for Wayne Corp to be 2.38, the risk free rate in the market to be 2%, and the expected return on the market to be 20. What is the expected return for Wayne Corp? (Answer in Percentage terms and Round to 2 decimals)
Suppose you are thinking of purchasing the Luna Co.’s common stock today. If you expect Luna to pay $2.5, $2.625, $2.73, and $2.81 dividends at the end of year one, two, three, and four respectively and you believe that you can sell the stock for $40.97 at the end of year four. If you required return on this investment is 9%, how much will you be willing to pay for the stock today?
Which of the following would offer the best return on investment? Assume that you buy $5,000 in stock in all three cases, and ignore interest and transaction costs in all your calculations. Also assume that decimal number of stocks can be bought so all the amount discussed is invested into the stocks in all three cases. Buy a stock at $90 without margin, and sell it a year later at $105. Buy a stock at $70 with 50% margin (50% loan), and sell it a year later at $85. Buy a stock at $65 with 25% margin (75% loan), and sell it a year later at $80. Alternative offers the best return on the investment.
Suppose you are thinking of purchasing the Moore Co.’s common stock today. If you expect Moore to pay $2.5, $2.625, $2.73, and $2.81 dividends at the end of year one, two, three, and four respectively and you believe that you can sell the stock for $40.97 at the end of year four. If you required return on this investment is 9%, how much will you be willing to pay for the stock today?

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