You buy 100 SPDRs (Standard and Poor\'s Depositary Receipts) at $105 per unit. A

Question

You buy 100 SPDRs (Standard and Poor's Depositary Receipts) at $105 per unit. A SPDR is a Standard and Poor's Depositary Receipt. A SPDR is an exchange traded fund (ETF) that is designed to generate the same return as the S&P; 500 index. You borrowed $1, 260 to make the purchase. Assume that the borrowing is achieved by issuing (short-selling) T-Bills. What are the portfolio weights on the SPDRs and T-Bills positions? The portfolio weight on the SPDRs position is (Round to four decimal places.) The portfolio weight on the T-Bills position is (Round to four decimal places.)

Explanation / Answer

Statement showing computations Particulars Amount Portfolio Weights SPDR = 100 *105             10,500.00                                    1.14 T- Bills             (1,260.00)                                 (0.14)                9,240.00                                    1.00

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