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WG's portfolio (Posted on 2020-04-27) Difficulty: 3 of 5
My friend WG (a.k.a. Wise Guy) recently bought some shares. He does not disclose neither the quantity nor the prices but would like to get your help in evaluating the profitability of his investment:
40% of his money - in shares of company A(P/E=35),
35% - shares of company B(P/E=20)
15% - company C(P/E=16),
& 10% - company D (P/E=12).

WG likes to get from you the value of his portfolio's P/E index.

Rem: P/E ratio is defined as market value divided by earnings.

No Solution Yet Submitted by Ady TZIDON    
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Comments: ( Back to comment list | You must be logged in to post comments.)
different solution | Comment 2 of 4 |
Say you spend 40+35+15+10=100.

Then since E=P/(P/E), total earnings = 40/35 + 35/20 + 15/16 + 10/12

and the aggregate P/E = 100/4.6636904761904761904761904761905
=21.442246330567964262922782386726

  Posted by xdog on 2020-04-27 16:14:09
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