Question

A portfolio has 80 shares of Stock A that sell for $42 per share and 100...

A portfolio has 80 shares of Stock A that sell for $42 per share and 100 shares of Stock B that sell for $26 per share.
Required:
(a) What is the portfolio weight of Stock A?

  

(b) What is the portfolio weight of Stock B?
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Homework Answers

Answer #1


Total value of A = 80 shares x $42 per share = 80 x 42 = $3360

Total value of B = 100 shares x $26 per share = 100 x 26 = $2600

Total value of A&B = Total value of A + Total Value of B = 3360 + 2600 = $5960

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Weight of A = Total value of A / Total value of A&B

Weight of A = 3360/5960

Weight of A = 0.563758389 or 0.56

.

Weight of B = Total value of B / Total value of A&B

Weight of B = 2600 / 5960

Weight of B = 0.436241611 or 0.44

Note: Please apply rounding as per your requirement because it is not mentioned in the question

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