Final answer:
The portfolio weights for the given portfolio are approximately 0.4531 for Stock A and 0.5469 for Stock B.
Step-by-step explanation:
To calculate the portfolio weights, we need to find the total market value of the portfolio and the market value of each stock.
The market value of Stock A is calculated by multiplying the number of shares (200) by the share price ($97):
Market value of Stock A = 200 * $97 = $19,400
The market value of Stock B is calculated by multiplying the number of shares (175) by the share price ($134):
Market value of Stock B = 175 * $134 = $23,450
The total market value of the portfolio is the sum of the market values of Stock A and Stock B:
Total market value = $19,400 + $23,450 = $42,850
To find the portfolio weight of each stock, we divide the market value of the stock by the total market value of the portfolio and round the answer to 4 decimal places:
Portfolio weight of Stock A = Market value of Stock A / Total market value = $19,400 / $42,850 ≈ 0.4531
Portfolio weight of Stock B = Market value of Stock B / Total market value = $23,450 / $42,850 ≈ 0.5469