Suppose you want to use your savings accounts to build a portfolio of stocks. Your savings...
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Suppose you want to use your savings accounts to build a portfolio of stocks. Your savings amount to $10 thousand. (a) You decide to take positions in 4 different stocks. (1) $500 of your portfolio in Google stocks; (2) 400$ in Apple stocks; (3) $700 in Amazon stocks; (4) you are shorting Twitter. Calculate the portfolio weights of the four different stocks. (b) What is the value of the short position in Twitter? In other words, how much money are you "borrowing" by shorting Twitter? (c) Alternatively, you are considering a portfolio that has the amount of money in- vested in Google and Apple, you are still considering going long on Amazon, and short on Twitter for an amount of $250 dollars. Calculate the portfolio weights of the four different stocks. Suppose you want to use your savings accounts to build a portfolio of stocks. Your savings amount to $10 thousand. (a) You decide to take positions in 4 different stocks. (1) $500 of your portfolio in Google stocks; (2) 400$ in Apple stocks; (3) $700 in Amazon stocks; (4) you are shorting Twitter. Calculate the portfolio weights of the four different stocks. (b) What is the value of the short position in Twitter? In other words, how much money are you "borrowing" by shorting Twitter? (c) Alternatively, you are considering a portfolio that has the amount of money in- vested in Google and Apple, you are still considering going long on Amazon, and short on Twitter for an amount of $250 dollars. Calculate the portfolio weights of the four different stocks.
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SOLUTION a To calculate the portfolio weights we need to divide the amount invested in each stock by ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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