Compute return on investment in dollars

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You construct a portfolio of 3000 shares of company A at $10 per share and 500 shares of company B at $40 per share. Company A's share price experiences a capital gain of $15 per share and company B a capital loss of $5 per share. There was no dividend payment for both companies.

Problem A). What is the portfolios new value in dollars?

Problem B). Compute your return on investment in dollars?

Problem C). Calculate the individual weights of company A if you have a target portfolio return of 72%.

Problem D). If the correlation coefficient between the two shares is negative. What does this imply regarding the relationship between the two shares?

Reference no: EM132753878

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