148k views
0 votes
An investor owns $8,000 of Adobe Systems stock, $9,000 of Dow Chemical, and $9,000 of Office Depot. What are the portfolio weights of each stock?

1 Answer

5 votes

Answer:

Adobe System

0.3077 ± 0.001

Dow Chemical

0.3462 ± 0.001

Office Depot

0.3462 ± 0.001

Step-by-step explanation:

Calculation for the portfolio weights of each stock

First step is to calculate the Total portfolio

Total portfolio = $8,000 + $9,000 + $9,000

Total portfolio == $26,000

Last step is to calculate the portfolio weights of each stock

Adobe System weight = $8,000 / $26,000

Adobe System weight = 0.3077

Dow Chemical weight = $9,000 / $26,000

Dow Chemical weight = 0.3462

Office Depot weight = $9,000 / $26,000

Office Depot weight= 0.3462

Therefore the portfolio weights of each stock will be :

Adobe System

0.3077 ± 0.001

Dow Chemical

0.3462 ± 0.001

Office Depot

0.3462 ± 0.001

User Manu Manjunath
by
5.9k points