A stock market comprises 2000 shares of stock A and 2000 shares of stock B.The share prices for stocks A and B are $20 and $10,respectively.What is the capitalization of the market portfolio?

Question

Quizplus · Accepted Answer

Capitalization of the market portfolio is calculated by multiplying the number of outstanding shares (in this case, 2000 shares each for stocks A and B) by their respective share prices and then taking the sum of the two.

Capitalization of stock A = 2000 shares x $20/share = $40,000 
Capitalization of stock B = 2000 shares x $10/share = $20,000 
Total market capitalization = $40,000 + $20,000 = $60,000

Therefore, the correct answer is (B) $60,000.

A Stock Market Comprises 2000 Shares of Stock a and 2000