Question

What are the portfolio weights for a portfolio that has 134 shares of Stock A that sell for $44 per share and 114 shares of Stock B that sell for $34 per share? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)

Answer 1

Answer:portfolio weights -A=0.6034; B=0.3966

Step-by-step explanation:

Total value of stock A = no. of shares * market value per share

= 134 x $44= $5,896

Total value of stock B = 114 x $34 = $3,876

Weight of stock A = Total value of stock A / ( Total value of stock A+Total M value of stock B)

= 5,896/ (5896+3,876 )

= 5,896/9,772

= 0.6034

Weight of stock B =Total value of stock B / ( Total value of stock A+Total value of stock B) OR 1 - Weight of stock A

=3,876 / (5896+3,876 )

=3,876 //9,772

= 0.3966

OR 1-0.6034 =0.3966