week 5 practice exercise 2 – www.savvyessaywriters.net
week 5 practice exercise 2 – www.savvyessaywriters.net
Recall the three stocks and benchmark you identified at the beginning of week 1.
1a. Calculate the holding period return for each stock from the viewpoint of an investor who purchased them at the closing price on Monday of Week 1 and held them until the closing of the market on Wednesday of Week 5. If you need to review this calculation, refer to the Week 1 notes.
If you had initially invested $10,000 in each of the three stocks, how much would your portfolio be worth at the end of your holding period?
1b. Repeat the calculations in 1a. for your benchmark. (Holding period return and ending value of a $10,000 initial investment.)
2. Discuss reasons for the differences in results for 1a. and 1b. In retrospect, was your benchmark a reasonable one? Why or why not?
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