If you own 1,000 shares of Alaska Corporation at $19.95, 250 shares of Best Company at $17.50, and 250 shares of Motor Company at $2.50, what are the portfolio weights of each stock?
A) Alaska = 0.1000, Best = 0.2500, Motor = 0.2500
B) Alaska = 0.4994, Best = 0.4380, Motor = 0.0626
C) Alaska = 0.7996, Best = 0.1754, Motor = 0.0250
D) Alaska = 0.1995, Best = 0.1750, Motor = 0.0250

Question

Quizplus · Accepted Answer

The total value of the portfolio is $19,950 (Alaska) + $4,375 (Best) + $625 (Motor) = $24,950. The weights are calculated as the value of each stock divided by the total portfolio value: Alaska = $19,950/$24,950 = 0.7996, Best = $4,375/$24,950 = 0.1754, Motor = $625/$24,950 = 0.0250.

If You Own 1,000 Shares of Alaska Corporation at $19