Question

What are the portfolio weights for a portfolio that has 120 shares of stock a that sell for $30 per share and 100 shares of stock be that sell for 20.00 per share

Answer 1

Solution:

Stock A : 120 shares * $30 per share = $3600

Stock B : 100 shares * $20 per share = $2000

Total : $3600 + $2000= $5600

Portfolio weights :

Stock A : $3600/$5600= 0.6429

Stock B : $2000/$5600= 0.3571