Portfolio Weights An investor owns $2,000 of Adobe Systems stock,$4,000 of Dow Chemical,and $6,000 of Office Depot.What are the portfolio weights of each stock?
A)Adobe System = 0.3333, Dow Chemical = 0.3333, Office Depot = 0.3333
B)Adobe System = 0.1667, Dow Chemical = 0.3333, Office Depot = 0.5
C)Adobe System = 0.3333, Dow Chemical = 0.1667, Office Depot = 0.5
D)Adobe System = 0.2, Dow Chemical = 0.4, Office Depot = 0.6

Question

Quizplus · Accepted Answer

The total investment is $12,000 ($2,000 + $4,000 + $6,000). The portfolio weights are calculated by dividing each stock's value by the total investment: Adobe Systems = $2,000/$12,000 = 0.1667, Dow Chemical = $4,000/$12,000 = 0.3333, Office Depot = $6,000/$12,000 = 0.5.

Portfolio Weights an Investor Owns $2,000 of Adobe Systems Stock,$4,000