If you own 300 shares of Alaska Air at $15.88, 250 shares of Best Buy at $151.00, and 1,150 shares of Ford Motor at $3.51, what are the portfolio weights of each stock?
A) Weight of Alaska Air: 10.23%; Weight of Best Buy: 81.09%; Weight of Ford Motor: 8.67%
B) Weight of Alaska Air: 6.23%; Weight of Best Buy: 71.09%; Weight of Ford Motor: 22.67%
C) Weight of Alaska Air: 15.23%; Weight of Best Buy: 81.09%; Weight of Ford Motor: 3.67%
D) Weight of Alaska Air: 20.23%; Weight of Best Buy: 76.09%; Weight of Ford Motor: 3.67%

Question

Quizplus · Accepted Answer

To calculate the portfolio weights of each stock, we need to divide the value of each stock by the total portfolio value. The value of Alaska Air is 300 shares x $15.88 = $4,764. The value of Best Buy is 250 shares x $151.00 = $37,750. The value of Ford Motor is 1,150 shares x $3.51 = $4,030.50. The total value of the portfolio is $46,544.50. Therefore, the weight of Alaska Air is ($4,764/$46,544.50) x 100% = 10.23%. The weight of Best Buy is ($37,750/$46,544.50) x 100% = 81.09%. The weight of Ford Motor is ($4,030.50/$46,544.50) x 100% = 8.67%.

If You Own 300 Shares of Alaska Air at $15