Question

What are the portfolio weights for a portfolio that has 138 shares of Stock A that sell for $48 per share and 118 shares of Stock B that sell for $38 per share

Answer 1

Explanation:

The portfolio weight of an asset is the total investment in that asset divided by the total portfolio value. First, we will find the portfolio value, which is:

Total value = 122($32) + 102($22) = $6,148

The portfolio weight for each stock is:

WeightA = 122($32) / $6,148 = .6350

WeightB = 102($22) / $6,148 = .3650