anday, scan your work into a PDF file and upload it onto Canvas)
Consider a hypothetical equacking Portfolio How many shares of each of the three stocks and created this tracking portfolio with an initial investment of $12,000.
b. On (6)/(18)/2024, you conducted a routine review of the portfolio in order to see if it stays equal-weighted after the price changes. Making no changes to the holdings, compute the actual portfolio weights of the three stocks based on the new prices.
c. Based on your results from part b), determine whether or not the portfolio needs to be re-balanced so that it can resume equal weights. If you believe rebalancing is necessary, explain how you should adjust the holdings in each of the three stocks in order to resume equal-weights (i.e., find how many share of each of stock should be bought or sold in order to resume equal weights).
d. Why this tracking portfolio should be considered a contrarian style investment?
Page 1 of 4
1.
r work into a PDF file and upload it onto Canvas) Stock X Price on 3/18/24 Y $10 Price on 6/18/24 Outstanding Shares(mi) Z $40 $11 on3/18/24 Outstanding Shares(mil) None of the stocks pay dividends. $200 400 on6/18/24 $150 100 400 10 100 10 How many shares of each of the three stocks do you need to purchase?
prices.
C.
Based on your results from part b,determine whether or not the portfolio needs to be re-balanced so that it can resume resume equal weights) stocks in order to resume equal-weights (i.e., find how many share of each of stock should be bought or sold in order to
d. Why this tracking portfolio should be considered a contrarian style investment?
Page 1of 4