Question

You own 430 shares of stock x at a price of $43 per share, 300 shares of stock y at a price of $66 per share, and 365 shares of stock z at a price of $89 per share. what is the portfolio weight of stock y?

O .3934
O .3147
O .4590
O .2613
O .2798

Answer 1

The correct answer is option 5. To calculate the portfolio weight of stock Y, you need to divide the total value of stock Y by the total portfolio value. After calculating the values, the portfolio weight of stock Y is approximately 0.2798.

Step-by-step explanation:

To calculate the portfolio weight of stock Y, we first need to determine the total value of the portfolio and then calculate the proportion of that total value that is made up of stock Y.

The total value of the stocks is calculated as follows:

• Stock X: 430 shares × $43/share = $18,490
• Stock Y: 300 shares × $66/share = $19,800
• Stock Z: 365 shares × $89/share = $32,485

The total portfolio value is the sum of these values:

$18,490 (X) + $19,800 (Y) + $32,485 (Z) = $70,775

The portfolio weight of stock Y is the value of stock Y divided by the total value of the portfolio:

$19,800 / $70,775 ≈ 0.2798

So, the correct option for the portfolio weight of stock Y is 0.2798.