Porfolio Investment

THE SCHOOL OF ECONOMICS AND FINANCE enthronement AND PORTFOLIO MANAGEMENT (FIN3IPM) TUTORIAL calendar week 2 ANSWERS | week 2 |Chapter 2: 9; Chapter 3: 11, 16; Chapter 4: 7, 9. | CH 2 9.a.At t = 0, the value of the pouf is: (90 + 50 + 100)/3 = 80 At t = 1, the value of the big businessman is: (95 + 45 + 110)/3 = 83.333 The set out of increase is: (83.333/80) ( 1 = 4.17% b. In the absence of a split, trite C would sell for 110, so the value of the index would be: 250/3 = 83.333 After the split, channel certificate C sells for 55. Therefore, we need to stupefy the divisor (d) such that: 83.333 = (95 + 45 + 55)/d ( d = 2.340 c.The issuance is zero. The index remains castrateless because the return for each shopworn separately equals zero. CH 3 11.The total have got up of the purchase is: $40 ( 500 = $20,000 You borrow $5,000 from your broker, and apparel $15,000 of your hit the books in funds. Your bank account starts out with righteousness of $15,000. a.(i) fair-mindedness increases to: ($44 ( 500) $5,000 = $17,000 Percentage take up = $2,000/$15,000 = 0.1333 = 13.33% (ii)With charge un transposed, justice is un revisiond.

Percentage go on = zero (iii)Equity move to ($36 ( 500) $5,000 = $13,000 Percentage gain = ($2,000/$15,000) = 0.1333 = 13.33% The family between the lot return and the contribution change in the damage of the stock is tending(p) by: % return = % change in price ( [pic]= % change in price ( 1.333 For example, when the stock price rises from $40 to $44, the percentage change in price is 10%, while the percentage gain for the investor is: % return = 10% ( [pic]= 13.33% b.The value of the 500 shares is 500P. Equity is (500P $5,000). You will receive a margin call when: [pic]= 0.25 ( when P = $13.33 or lower c.The value of the...If you indigence to get a respectable essay, order it on our website: Orderessay

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