Kunal Nayyar from California, had $50,000 in investments at the beginning of the year that consisted of a diversified portfolio of stocks (40%), bonds (40%), and cash equivalents (20%). His returns over the last year were 13% on stocks, 6% on bonds, and 1% on cash equivalents. What was his average return for the year? If Kunal wanted to rebalance his portfolio to its original position, what specific action should he take?
Kunal Nayyar from California, had $50,000 in investments at the beginning of the year that consisted of a diversified portfolio of stocks (40%), bonds (40%), and cash equivalents (20%). His returns over the last year were 13% on stocks, 6% on bonds, and 1% on cash equivalents. What was his average return for the year? If Kunal wanted to rebalance his portfolio to its original position, what specific action should he take?
Do I just add each return and divide by three to get the average return? I am really not sure how to return his portfolio to the original position.
Weighted average cost of capital WACC gives the firms combined cost of capital, including the equity, preference shares and debts. The weight of each of the financial sources are calculated by the proportion of their investment.
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