If you own 400 shares of Air Line Inc. at $44.50, 500 shares of BuyRite at $52.90, and 100 shares of MotorCity at $9.25, what are the portfolio weights of each stock?
A) Air Line = 0.3333, BuyRite = 0.3333, MotorCity = 0.3333
B) Air Line = 0.40, BuyRite = 0.50, MotorCity = 0.10
C) Air Line = 0.3940, BuyRite = 0.5855, MotorCity = 0.0205
D) Air Line = 0.4173, BuyRite = 0.4960, MotorCity = 0.0867

Question

Quizplus · Accepted Answer

To calculate the portfolio weights, first find the total value of each stock holding, then divide each by the total portfolio value. Air Line Inc. = 400 * $44.50 = $17,800. BuyRite = 500 * $52.90 = $26,450. MotorCity = 100 * $9.25 = $925. Total portfolio value = $17,800 + $26,450 + $925 = $45,175. Weights: Air Line = $17,800 / $45,175 = 0.3940, BuyRite = $26,450 / $45,175 = 0.5855, MotorCity = $925 / $45,175 = 0.0205.

If You Own 400 Shares of Air Line Inc