A portfolio has 100 shares of Stock A that sell for 39 per s

A portfolio has 100 shares of Stock A that sell for $39 per share and 110 shares of Stock B that sell for $19 per share. Required: (a) What is the portfolio weight of Stock A? (b) What is the portfolio weight of Stock B?

Solution

Total value of:

A=(100*39)=$3900

B=(110*19)=$2090

Total=$5990

Hence a.portfolio weight of A=(3900/5990)=0.6511(or 65.11%(Approx).

Hence a.portfolio weight of B=(2090/5990)=0.3489(or 34.89%(Approx).