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A portfolio consists of 265 shares of Stock C that sells for $50 and 230 shares of Stock D that sells for $25. What is the portfolio weight of Stock C?

a. .7555
b. .7845
c. .3026
d. .2594
e. .6974

User Dwhite
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1 Answer

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Answer:Weight of Stock C=0.6974----- E

Step-by-step explanation:

The Value of a stock is given as No. of Shares x Share Price

Therefore

Value of C = No. of Shares OF C x Share Price of Stock C= 265 x $50= $13,250

Value of D = No. of Shares of D x Share Price of Stock D= 230 x $25 = $5,750

Total value of Portfolio= Value of C + Value of D = $13,250 +$5,750 =$19,000

Also,

Weight of stock = value of stock/Total value

Therefore

Weight of Stock C = Value of C / Total Portfolio Value =

$13,250 / $19,000=0.69736 = 0.6974

User Heitor Chang
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