Tuesday, 1 October 2019

2) At end of Day 1, I invest equal amounts of money in shares of company A and B.

2) At end of Day 1, I invest equal amounts of money in shares of company A and B.
By end of Day 2, the price of company A shares has doubled and the price of company B shares has halved (compared to Day 1 price).
  • What is the return on my entire investment from Day 1 to Day 2 ?
  • What are the weights of my portfolio at the end of Day 2 ?
  • At the end of Day 3, the price of company A shares has halved and the price of company B shares has quadrupled (compared to Day 2 price).
What is the return on my investment from end of Day 1 to end of Day 3 ?

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