1. Year-to-date, Oracle had earned a 1.42 percent return. During the same time p

Question

1.

Year-to-date, Oracle had earned a 1.42 percent return. During the same time period, Valero Energy earned 7.74 percent and McDonald's earned 0.48 percent.

The table below shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year.

Year-to-date, Oracle had earned a 1.42 percent return. During the same time period, Valero Energy earned 7.74 percent and McDonald's earned 0.48 percent.

If you have a portfolio made up of 30 percent Oracle, 25 percent Valero Energy, and 45 percent McDonald's, what is your portfolio return? (Round your answer to 2 decimal places.)

2.

The table below shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year.

  Company Shares Beginning of
Year Price Dividend per Share End of Year Price   US Bank 300 $ 43.50 $ 2.06 $ 43.43   Pepsico 200 59.08 1.16 62.55   JDS Uniphase 500 18.88 16.66   Duke Energy 250 27.45 1.26 33.21 What is your portfolio dollar return and percentage return? (Round your answers to 2 decimal places.)

Explanation / Answer

Answer

Weight of Oracle = 30%
Weight of Valero Energy = 25%
Weight of McDonald = 45%

Return of Oracle = -1.42%
Return of Valero Energy = 7.74%
Return of McDonald = 0.48%

Portfolio Return = Weight of Oracle * Return of Oracle + Weight of Valero Energy * Return of Valero Energy + Weight of McDonald * Return of McDonald
Portfolio Return = 30% * (-1.42%) + 25% * 7.74% + 45% * 0.48%
Portfolio Return = 1.73%

So, Portfolio Return is 1.73%

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