Question

What are the portfolio weights for a portfolio that has 115 shares of Stock A that sell for $43 per share and 180 shares of Stock B that sell for $19 per share

Answer 1

The answer is:

Stock A: 0.5912

Stock B: 0.4088

Step-by-step explanation:

The amount invested in stock A:

Number of shares x price per share

115 sharesx $43

= $4,945

The amount invested in stock B:

Number of shares x price per share

180 shares x $19

$3,420

Total amount invested

$4,945 + $3,420

=$8,365

The portfolio weight for A:

$4,945/$8,365

= 0.5912

The portfolio weight for B:

$3,420 /$8,365

= 0.4088