Wendell invests $10,000 in a stock por5tfolio made up of Petroleum Special at $30 per share, Newshoe at $12 per share, and Beans & Sprouts at $2.50 per share. He places 60% of the money in P.S., 30% in N, and 10% in B & S. With market values changing (P.S. down $3.12, N up 80%, and B & S up $0.20), what is his portfolio worth six months later?

Question

Wendell invests $10,000 in a stock por5tfolio made up of Petroleum Special at $30 per share, Newshoe at $12 per share, and Beans & Sprouts at $2.50 per share. He places 60% of the money in P.S., 30% in N, and 10% in B & S. With market values changing (P.S. down $3.12, N up 80%, and B & S up $0.20), what is his portfolio worth six months later?

Answer 1

Basic Biomechanics. No kidding.

Answer 2

To calculate Wendell's portfolio worth six months later, we need to determine the current market value of each stock in his portfolio and then multiply it by the percentage of money invested in each stock.

First, let's calculate the current market value of each stock:

1. Petroleum Special (P.S.):
Since P.S. is down $3.12 from its original value of $30, the new value would be $30 - $3.12 = $26.88 per share.

2. Newshoe (N):
N is up 80%, so we need to find 80% of $12 and add it to the original price:
80% of $12 = 0.80 * $12 = $9.60
New value of N = $12 + $9.60 = $21.60 per share.

3. Beans & Sprouts (B & S):
B & S is up $0.20 from its original value of $2.50, so the new value would be $2.50 + $0.20 = $2.70 per share.

Now, let's calculate the total value of each stock in Wendell's portfolio based on the percentages:

1. P.S.:
Wendell invested 60% of his money in P.S., which means he invested $10,000 * 0.60 = $6,000.
The number of P.S. shares Wendell owns is $6,000 / $30 = 200 shares.
Total value of P.S. = 200 shares * $26.88 per share = $5,376.

2. N:
Wendell invested 30% of his money in N, which means he invested $10,000 * 0.30 = $3,000.
The number of N shares Wendell owns is $3,000 / $12 = 250 shares.
Total value of N = 250 shares * $21.60 per share = $5,400.

3. B & S:
Wendell invested 10% of his money in B & S, which means he invested $10,000 * 0.10 = $1,000.
The number of B & S shares Wendell owns is $1,000 / $2.50 = 400 shares.
Total value of B & S = 400 shares * $2.70 per share = $1,080.

Finally, let's calculate the total portfolio worth by summing up the values of all three stocks:
Total portfolio worth = Total value of P.S. + Total value of N + Total value of B & S
= $5,376 + $5,400 + $1,080
= $11,856.

Therefore, Wendell's portfolio is worth $11,856 six months later.