Discuss the below:
Q: Don has a portfolio containing 3 stocks. The stock, the number of shares, and current trading prices
Don wants to estimate what his portfolio will be worth one year from today. We assume his shares will have the following values ONE YEAR
FROM TODAY:
TCB: will have an expected value of $50/share, with a standard deviation of $2/share
RayWatch: will have a value between $20 and $26, with a share value of $24 being most likely.
BlingTime: will have a share value between $14 and $18.
Don WILL NOT be buying or selling any shares in the next year.
PROBLEM: USE SPREADSHEET SIMULATION IN EXCEL, or Crystal Ball, and Excel Add-in to determine:
Q1) What is the probability that Don's portfolio will be worth more TODAY than it will ONE YEAR FROM TODAY?
Q2) What is the probability that Don's portfolio will be worth MORE THAN $17,000 ONE YEAR FROM TODAY?
Q3) What is the probability that Don's portfolio will be worth LESS THAN $14,500 ONE YEAR FROM TODAY?
Q4) What is the 95% confidence interval for Don's portfolio value one year from today?
| STOCK |
Shares Owned |
Current Price |
|
Today's Value |
|
|
|
|
|
|
| TCB Inc |
150 |
48 |
|
$ 7,200.00 |
|
| RayWatch |
175 |
23 |
|
$ 4,025.00 |
|
| BlingTime |
325 |
15.75 |
|
$ 5,118.75 |
|
|
|
|
|
|
|
|
|
|
|
$16,343.75 |
|