Portfolio Weights If you own 600 shares of Alaska Corporation at $23.25,450 shares of Best Company at $34.50,and 150 shares of Motor Company at $6.95,what are the portfolio weights of each stock?
A)Alaska = 0.6000, Best = 0.4500, Motor = 0.1500
B)Alaska = 0.3594, Best = 0.5332, Motor = 0.1074
C)Alaska = 0.4571, Best = 0.5087, Motor = 0.0342
D)Alaska = 0.2325, Best = 0.3450, Motor = 0.0695

Question

Quizplus · Accepted Answer

To find the portfolio weights, calculate the total value of each stock and divide by the total portfolio value. Alaska: 600 * $23.25 = $13,950, Best: 450 * $34.50 = $15,525, Motor: 150 * $6.95 = $1,042.50. Total portfolio value = $13,950 + $15,525 + $1,042.50 = $30,517.50. Weights: Alaska = $13,950 / $30,517.50 = 0.4571, Best = $15,525 / $30,517.50 = 0.5087, Motor = $1,042.50 / $30,517.50 = 0.0342.

Portfolio Weights If You Own 600 Shares of Alaska Corporation