Final answer:
To calculate the investment fractions, divide the total investment in each stock by the total portfolio value: 56.0% for CSH and 44.0% for EJH. To calculate the return, determine the value change in each stock and then calculate the overall portfolio return.
Step-by-step explanation:
Portfolio Investment Proportions and Return
The question involves calculating the fractions of an investment portfolio invested in two different stocks, CSH and EJH, as well as determining the return on the portfolio after changes in stock prices. The total investment in CSH is calculated as 85 shares multiplied by $18, which equals $1,530. Similarly, the total investment in EJH is 40 shares multiplied by $30, giving us $1,200. To find out what fraction of your portfolio is invested in each stock, these amounts are divided by the total value of the portfolio.
To calculate the return on the portfolio, we need to take the new value of the investments after the stock price changes and subtract the original value of the investments. CSH's new value is 85 shares at $21 each, totaling $1,785, and EJH's new value is 40 shares at $28 each, for a total of $1,120. We compare these new amounts to the original amounts to find the return.
The fraction invested in CSH is calculated as $1,530 divided by the initial total portfolio value of $2,730, which yields approximately 56.0%. The fraction invested in EJH is $1,200 divided by the initial total portfolio value of $2,730, resulting in approximately 44.0%.