Question

Lester has a portfolio comprised of the following stocks:

stock number of shares price per share
a 830 $ 24
b 750 50
c 910 81
d 840 37

what is the portfolio weight of stock c?
A. 43.06 percent
B. 45.44 percent
C. 48.45 percent
D. 42.25 percent

Answer 1

The portfolio weight of stock C is calculated by dividing the total value of stock C by the entire portfolio's value. The weight of stock C is 45.44 percent.

Step-by-step explanation:

To determine the portfolio weight of stock C, we must calculate its value and compare it to the total value of all stocks in the portfolio. The value of stock C is found by multiplying the number of shares by the price per share. Thus, the value of stock C is 910 shares × $81 per share = $73,710. To find the total portfolio value, we repeat this process for each stock:

1. Stock A: 830 shares × $24 per share = $19,920
2. Stock B: 750 shares × $50 per share = $37,500
3. Stock D: 840 shares × $37 per share = $31,080

By adding these values together, we get the total portfolio value: $19,920 + $37,500 + $73,710 + $31,080 = $162,210. Now we calculate the weight of stock C by dividing the value of stock C by the total value of the portfolio: $73,710 / $162,210 ≈ 0.4544, or 45.44%. Therefore, the portfolio weight of stock C is 45.44 percent.