Question

A portfolio conssts of 275 shares of Stock C that seilsfor $52 and 240 shares of Stock D that sells for $23. What is the portfolio weight of Stock c? a. 7816 b. 8117 c. 7215 d. 2387e. 2785

Answer 1

c. 7215

Step-by-step explanation:

Number of shares of Stock C = 275

Value of Stock C = $52

Number of shares of Stock D = 240

Value of Stock D = $23

The weight of stock of a given stock is defined by the total value of the stock divided by the total value of the portfolio. For stock C:

`Value_C = 275*\$52=\$14,300\\Value_D = 240*\$23=\$5,520\\WS_C = (\$14,300)/(\$14,300+\$5,520) \\WS_C = 0.7215 = 72.15%`

The weight of of Stock C is 0.7215 or 72.15%.