Answer:
- (a) What are the portfolio weights of the three stocks in your portfolio?
Stock Weights
Apple 30%
Cisco 19%
Colgate 51%
TOTAL 100%
- (b) What is the expected return of your portfolio?
Stock Expected Ret. Portfolio
Apple 3,6%
Cisco 1,9%
Colgate 4,1%
Portfolio 9,6%
- (c) What are the new portfolio weights?
Stock Weights
Apple 30%
Cisco 24%
Colgate 45%
TOTAL 100%
- (d) what is the expected return of the portfolio at the new prices?
Stock Expected Ret. Portfolio
Apple 3,6%
Cisco 2,4%
Colgate 3,6%
TOTAL 9,7%
Explanation:
- (a) What are the portfolio weights of the three stocks in your portfolio?
To calculate the portfolio weights it's necessary to know the total value by Stock of the portfolio, with the information available about share prices and sharea outstanding is possible to find the total value of the portfolio and the weights of each share.
Stock Value Weights
Apple $309,000 30%
Cisco $200,000 19%
Colgate $530,000 51%
TOTAL $1,039,000 100%
- (b) What is the expected return of your portfolio?
The Expected Return of the portfolio it's related to the weights of each stock, with the information about the Expected Return and the Weights of each stock it's possible to know the Expected Return of the Portfolio.
Stock Exp Return Value Weights Exp. Ret. Portfolio
Apple 12% 309.000 30% 3,6%
Cisco 10% 200.000 19% 1,9%
Colgate 8% 530.000 51% 4,1%
TOTAL 1.039.000 100% 9,6%
When the value of each share changes, this impacts the total value of the portfolio and current weights, then changes the Expected Return of the portfolio.
Answer:
The calculation will be more accurate, because the base year is the oldest.
CPI is calculated as
(P_n / P_base - 1)*100
as:
P_n prices at time n
The mathematical reason why it is better to take the oldest year is that % growth works better
Answer:
Option C 30 Percent Time
Explanation:
Thirty percent of the management time is spent on marketing the products because the market is getting crowded with suppliers and getting sales has become difficult. Many firms focus more on marketing of its product because of tough competition and because of the differentiation that they are offering which the rival can not match.
Answer:
Long-term capital gain = $73,000
Explanation:
The long-term capital gain (LTCG) can be calculated using the following formula:
Long-term capital gain = Selling price - Cost of acquisition - Cost of improvement .............. (1)
Where;
Selling price = $212,000
Cost of acquisition = $113,000
Cost of improvement = $26,000
Substituting the values into equation (1), we have:
Long-term capital gain = $212,000 - $113,000 - $26,000 = $73,000
Note:
Since no information on cost inflation index is given in the question, that implies that there is no need to use indexed cost of acquisition and indexed cost of improvement in our calculation. Therefore, the Cost of acquisition and Cost of improvement has to be used as given in the question.
Answer:
A. attracted both trade and foreign direct investment.
Explanation:
Restrictive trade practices refer to every deliberate and conscious effort made by the government of a country to hinder the free flow of trade across international boarder. Trade restrictions can be in form of high tariff on import, import quota, outright embargo, e.t.c
The reduction or elimination of barrier to free trade is trade liberalization. It is also seen as free market reform as the market forces or price systems are allowed to allocate resources.
Where a country embraces free market reform, it opens her doors to inflow of trade and foreign direct investment popularly known as FDI.
