Question

You own 410 shares of Stock X at a price of $39 per share, 280 shares of Stock Y at a price of $62 per share, and 345 shares of Stock Z at a price of $85 per share. What is the portfolio weight of Stock Y?

Answer 1

To calculate the portfolio weight of Stock Y, divide the value of Stock Y by the total value of the portfolio, then multiply by 100 to get a percentage. The portfolio weight of Stock Y is approximately 25.25%

Step-by-step explanation:

To calculate the portfolio weight of Stock Y, we need to divide the value of Stock Y by the total value of the portfolio.

The value of Stock Y can be calculated by multiplying the number of shares (280) by the price per share ($62). This gives us a value of $17,360 for Stock Y.

The total value of the portfolio can be calculated by adding the values of all the stocks: (410 shares of Stock X * $39 per share) + (280 shares of Stock Y * $62 per share) + (345 shares of Stock Z * $85 per share). This gives us a total value of $68,780 for the portfolio.

Now, we can calculate the portfolio weight of Stock Y by dividing the value of Stock Y ($17,360) by the total value of the portfolio ($68,780) and multiplying by 100 to get a percentage. The portfolio weight of Stock Y is approximately 25.25%.