Question

What are the portfolio weights for a portfolio that has 145 shares of Stock A that sell for $47 per share and 130 shares of Stock B that sell for $86 per share?

Answer 1

Answer:

Stock A = 0.3787

Stock B= 0.6212

Explanation:

The first step is to calculate the total value

= 145(47) + 130(86)

= 6,815 + 11,180

= $17,995

Therefore the portfolio weights of each stock can be calculated as follows

Stock A = 145(47)/17,995

= 6815/17,995

= 0.3787

Stock B = 130(86)/17,995

= 11,180/17,995

= 0.6212