Question

What are the portfolio weights for a portfolio that has 126 shares of Stock A that...

What are the portfolio weights for a portfolio that has 126 shares of Stock A that sell for $36 per share and 106 shares of Stock B that sell for $26 per share? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Portfolio weights
  Stock A   
  Stock B   
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Answer #1

Value of stock A= 126*$36= $4,536

Value of stock B= 106*$26= $2,756

Total value of portfolio= $4,536 + $2,756= $7,292

Portfolio weight of stock A= $4,536/ $7,292

                                                   = 0.6221*100

                                                   = 62.21%

Portfolio weight of stock B= $2,756/ $7,292

                                                   = 0.3779*100

                                                   = 37.79%.

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