A portfolio has three stocks - 200 shares of Yahoo (YHOO),100 Shares of General Motors (GM),and 50 shares of Standard and Poor's Index Fund (SPY).If the price of YHOO is $30,the price of GM is $30,and the price of SPY is $130,calculate the portfolio weight of YHOO and GM.

Question

Quizplus · Accepted Answer

The total value of the portfolio is:
(200 shares of YHOO) x ($30 per share) + (100 shares of GM) x ($30 per share) + (50 shares of SPY) x ($130 per share) = $6,000 + $3,000 + $6,500 = $15,500

The weight of YHOO in the portfolio is:
(200 shares of YHOO) x ($30 per share) / $15,500 = 0.387 = 38.7%

The weight of GM in the portfolio is:
(100 shares of GM) x ($30 per share) / $15,500 = 0.194 = 19.4%

Therefore, the correct answer is A, with YHOO having a portfolio weight of 38.7% and GM having a portfolio weight of 19.4%.

A Portfolio Has Three Stocks - 200 Shares of Yahoo