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You own three​ stocks: 600 shares of Apple​ Computer,

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You own three​ stocks: 600 shares of Apple​ Computer, 10,000 shares of

Cisco​ Systems, and 5,000 shares of​ Colgate-Palmolive. The current share prices and expected returns of​ Apple, Cisco, and​ Colgate-Palmolive are,​ respectively, $520​, $15​, $ 107$107 and 12%​, 10%​, 8%.

a. What are the portfolio weights of the three stocks in your​ portfolio?

b. What is the expected return of your​ portfolio?

c. Suppose the price of Apple stock goes up by $22​, Cisco rises by $6​, and​ Colgate-Palmolive falls by $12. What are the new portfolio​ weights?

d. Assuming the​ stocks’ expected returns remain the​ same, what is the expected return of the portfolio at the new​ prices?

 
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