A stock market comprises 5000 shares of stock A and 2000 shares of stock B.Assume the share prices for stocks A and B are $20 and $35,respectively.What proportion of the market portfolio is comprised of stock A?

Question

Quizplus · Accepted Answer

To find the proportion of the market portfolio that is comprised of stock A, we need to calculate the market value of stock A and stock B, and then divide the market value of stock A by the total market value of the portfolio. The market value of stock A is: 
5000 shares x $20/share = $100,000 
The market value of stock B is:
2000 shares x $35/share = $70,000 
The total market value of the portfolio is:
$100,000 + $70,000 = $170,000 
So the proportion of the market portfolio that is comprised of stock A is:
$100,000 / $170,000 = 0.588, which is approximately 58.8%. Therefore, the correct answer is A) 58.8%.

A Stock Market Comprises 5000 Shares of Stock a and 2000