Question

What are the portfolio weights for a portfolio that has 190 shares of Stock A that sell for $95 per share and 165 shares of Stock B that sell for $126 per share

Answer 1

Portfolio weight - Stock A = 46.473%

Portfolio weight - Stock B = 53.527%

Step-by-step explanation:

The weightage of portfolio refers to the amount of investment in each stock in the portfolio expressed as a percentage of total investment in the portfolio. The weightage of portfolio can be calculated by as follows,

Portfolio weightage = Investment in Stock A / Total Investment in Portfolio +

Investment in Stock B / Total Investment in Portfolio + ... +

Investment in Stock N / Total Investment in Portfolio

Total investment in portfolio = 190 * 95 + 165 * 126 = 38840

Investment in Stock A = 190 * 95 = 18050

Investment in Stock B = 165 * 126 = 20790

Portfolio weight - Stock A = 18050 / 38840 = 46.473%

Portfolio weight - Stock B = 20790 / 38840 =53.527%