Question

What are the portfolio weights for a portfolio that has 122 shares of Stock A that sell for $32 per share and 102 shares of Stock B that sell for $22 per share

Answer 1

Answer and Explanation:

The computation of the portfolio weights is shown below:

But before that first we need to determine the total value  of Stock A and Stock B which is

For STock A

= 122 × $32

= $3,904

For STock B

= 102 × $22

= $2,244

Now

Total value is

=  $3,904 + $2,244

= $6,148

And, finally weights are

For STock A

= $3,904 ÷ $6,148

= 0.6350

For Stock B

= $2,244 ÷ $6,148

= 0.365