A friend has confided in you that they have recently inherited a moderately sized investment portfolio from a relative. They don’t know what do with the assets, if anything. The friend comes to you for advice. Your immediate advice, of course, is for your friend to seek professional advice from a tax expert as well as a financial adviser. Your friend persists, however, and asks how the investment returns of the portfolio compare to other investments. You agree to review the portfolio and calculate the yields of each investment as well as determine the weighted average yield for the entire portfolio

Refer to the investment schedule that is available and fills in the blanks.

Type of Investment	Company Name	Stock Symbol	Portfolio Position (# of shares)	Current Market Price	Current Market Value	Estimated Dividend/Interest	Estimated Current Yield	Weighted Average Factor	Weighted Average Yield
Common stock	Altria	MO	119	50,20	[___]	$247,00	[___]	[___]	[___]
Common stock	AT&T	T	173	32,65	[___]	$325,00	[___]	[___]	[___]
Common stock	Chevron	CVX	26	104,98	[___]	$111,00	[___]	[___]	[___]
Common stock	Coca Cola	KO	59	40,55	[___]	$77,00	[___]	[___]	[___]
Common stock	Duke Energy	DUK	65	76,78	[___]	$206,00	[___]	[___]	[___]
Common stock	Johnson & Johnson	JNJ	31	100,60	[___]	$86,00	[___]	[___]	[___]
Common stock	McDonalds	MCD	52	97,44	[___]	$176,00	[___]	[___]	[___]
Common stock	Pepsi Cola	PEP	17	95,62	[___]	$44,00	[___]	[___]	[___]
Common stock	Philip Morris Intl	PM	70	75,33	[___]	$280,00	[___]	[___]	[___]
Common stock	Proctor & Gamble	PG	52	81,94	[___]	$133,00	[___]	[___]	[___]
								0
				Total Portfolio Market Value	[___]
								Weighted Average Yield:	[___]

For your quantitative analysis compute the current market value of each security position of the portfolio, calculate individual yields based on current market pricing, and determine the weighted average factor and the weighted average yields.

1. Explain the basis upon which you determined the weighted average yield?

2. Explain the difference between a yield that is based on cost, as opposed to one that is based on current market value. What would be the different uses of both?

3. What non-quantitative observations can you make about the portfolio?

Answer rating: 100% (QA)

1 Current Market Value No of Shares Current Market Price of each position Calculation of Current Mar... View the full answer