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 Stoc

Question

2 years ago

14

k B that sell for $22 per share

1 answer:

goblinko [34] · Answer 1 · 2022-05-18T18:59:57+03:00

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