What are the portfolio weights for a portfolio that has 154 shares of Stock A that sell for $50 per share and 120 shares of Stock B that sell for $25 per share? (Do not round intermediate calculations and round your answers to 4 decimal places, e

Finance Dec 19, 2020

What are the portfolio weights for a portfolio that has 154 shares of Stock A that sell for $50 per share and 120 shares of Stock B that sell for $25 per share?

(Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Expert Solution

Stock A has a portfolio weight of 71.9626%

Stock B has a portfolio weight of 28.0374%

154 shares of stock that sell for $50 each have a value of $7,700

120 shares of stock that sell for $25 each have a value of $3,000

Adding those two values together gives us a total portfolio value of $10,700

7,700 / 10,700 = 0.71962616822429906542056074766355 or 71.9626%

3,000 / 10,700 = 0.28037383177570093457943925233645 or 28.0374%

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