Problem
You are considering how to invest part of your retirement savings. You have decided to put $200 000 into three shares: 50% of the money in Minerva (currently, $25/share), 25% of the money in Baumann (currently, $80/share), and the remainder in Martin Associates (currently, $2/share). Minerva shares go up to $30/share, Baumann shares drop to $60/share and Martin Associates shares rise to $3 per share.
Task
1. What is the new value of the portfolio?
2. What return did the portfolio earn?
3. If you do not buy or sell shares after the price change, what are your new portfolio weights?