Use the table for the question(s)below.
Consider the following expected returns, volatilities and correlations:

-A share market comprises 2 000 shares of company A and 2 000 shares of company B. The share prices for companies A and B are $20 and $10, respectively. What is the capitalisation of the market portfolio?

Question

Use the table for the question(s)below.
Consider the following expected returns, volatilities and correlations:
 
-A share market comprises 2 000 shares of company A and 2 000 shares of company B. The share prices for companies A and B are $20 and $10, respectively. What is the capitalisation of the market portfolio?

Quizplus · Accepted Answer

The market capitalisation is the total value of all the shares in the market portfolio. To calculate the market capitalisation, we need to multiply the share prices by the number of shares for each company and then add them together: 
Total value of shares of company A = $20 × 2 000 = $40 000 
Total value of shares of company B = $10 × 2 000 = $20 000 
Total market capitalisation = $40 000 + $20 000 = $60 000 
Therefore, the correct answer is D.

Use the Table for the Question(s)below