Use the table for the question(s)below.
Consider the following stock price and shares outstanding data:
-Assume that you have $100,000 to invest and you are interested in creating a value-weighted portfolio of these four stocks.The percentage of the shares outstanding of Boeing that you would hold in your portfolio is closest to:
A).000018%.
B).000020%.
C).000024%.
D).000031%.

Question

Use the table for the question(s)below.
Consider the following stock price and shares outstanding data: 
-Assume that you have $100,000 to invest and you are interested in creating a value-weighted portfolio of these four stocks.The percentage of the shares outstanding of Boeing that you would hold in your portfolio is closest to:
A).000018%. 
B).000020%. 
C).000024%. 
D).000031%.

Quizplus · Accepted Answer

To create a value-weighted portfolio, we need to calculate the market capitalization for each stock by multiplying the stock price with the number of shares outstanding. Then, we need to calculate the total market capitalization for all four stocks. Finally, we need to determine the percentage of the total market capitalization that belongs to each stock.

Let's first calculate the market capitalization for each stock:

Boeing: $155.68 x 571,290,000 = $88,921,635,200
Coca-Cola: $49.12 x 4,260,000,000 = $209,731,200,000
McDonald's: $209.47 x 764,020,000 = $160,058,509,400
Nike: $85.47 x 1,615,000,000 = $137,941,050,000

Next, we calculate the total market capitalization:

$88,921,635,200 + $209,731,200,000 + $160,058,509,400 + $137,941,050,000 = $596,652,394,600

Now we can determine the percentage of the total market capitalization that belongs to Boeing:

$88,921,635,200 / $596,652,394,600 = 0.149

Therefore, the percentage of the shares outstanding of Boeing that you would hold in your portfolio is closest to 0.149%.

Converting this to a percentage with two decimal places, we get 0.15%.

The closest answer choice is C) 0.024%.

Use the Table for the Question(s)below