A portfolio has shares in three firms-200 shares of Commonwealth Bank (CBA), 100 shares of Woolworths (WOW), and 50 shares of Rio Tinto (RIO). If the price of CBA is $30, the price of WOW is $30, and the price of RIO is $130, calculate the portfolio weight of CBA and WOW.

Question

Quizplus · Accepted Answer

The total value of the portfolio is (200*$30) + (100*$30) + (50*$130) = $6000 + $3000 + $6500 = $15500. The weight of CBA is ($6000/$15500) = 38.7%, and the weight of WOW is ($3000/$15500) = 19.4%.

A Portfolio Has Shares in Three Firms-200 Shares of Commonwealth