Suppose over the next year Ball has a return of 12.5%,Lowes has a return of 20%,and Abbott Labs has a return of -10%.The weight of Abbott Labs in your portfolio after one year is closest to:
A) -10.0%
B) 43.5%
C) 45.0%
D) 50.0%

Question

Quizplus · Accepted Answer

B)
 11ea7e5a_6e62_3e93_9a0a_d7777b95eb29_TB1623_00 Value of portfolio = 20,000(1 + .035) = 20,700
Value of ABT = $10,000(1 + -.10) = $9,000
Weight for ABT = 9,000 / 20,700 = 0.434783

Suppose Over the Next Year Ball Has a Return of 12.5%,Lowes