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 proportion of the market portfolio is comprised of each stock?

Question

Quizplus · Accepted Answer

To find the proportion of each stock in the market portfolio, we need to calculate the total value of both stocks first. 
Total value of stock A = $20 x 2000 = $40,000 
Total value of stock B = $10 x 2000 = $20,000 
Total market value = $40,000 + $20,000 = $60,000 
Proportion of stock A = ($40,000 / $60,000) x 100 = 66.7% 
Proportion of stock B = ($20,000 / $60,000) x 100 = 33.3% 
Therefore, the best choice is A, where Stock A is 66.7% and Stock B is 33.3%.

A Stock Market Comprises 2000 Shares of Stock a and 2000