A Tim s portfolio contains two stocks Lightco and Shineco Last
a) Tim’s portfolio contains two stocks, Lightco and Shineco. Last year his portfolio returned 14 percent. Lightco’s return as 5 percent and Shineco returned 20 percent. What are the weights of each in Tim’s portfolio?
b) The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio and Brightco’s weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent and Brightco loses 5 percent. What was the return on his portfolio?
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