Final answer:
The portfolio weights for the given stocks can be calculated by dividing the total value of each stock by the total value of the portfolio. The portfolio weight for Stock A is approximately 60.7%, and the portfolio weight for Stock B is approximately 39.3%.
Step-by-step explanation:
The portfolio weights can be calculated by dividing the total value of each stock by the total value of the portfolio. Let's calculate the total value of stock A: Total value of stock A = Number of shares x Price per share = 132 x $42 = $5544. Next, let's calculate the total value of stock B: Total value of stock B = Number of shares x Price per share = 112 x $32 = $3584.
The total value of the portfolio is the sum of the values of stock A and stock B: Total value of the portfolio = $5544 + $3584 = $9128 .Finally, the portfolio weight of stock A is calculated by dividing the value of stock A by the total value of the portfolio: Portfolio weight of stock A = Value of stock A / Total value of the portfolio = $5544 / $9128 ≈ 0.607 = 60.7%
The portfolio weight of stock B is calculated similarly: Portfolio weight of stock B = Value of stock B / Total value of the portfolio = $3584 / $9128 ≈ 0.393 = 39.3%