Travis has a portfolio consisting of two stocks, A and B, which is valued at $42,900. Stock A is worth $23,900. What is the portfolio weight of stock B?
A) .428
B) .443
C) .449
D) .452
E) .454

Question

Quizplus · Accepted Answer

To find the portfolio weight of stock B, we need to divide the value of stock B by the total portfolio value:

Portfolio weight of stock B = Value of stock B / Total portfolio value

Since the total portfolio value is $42,900 and the value of stock A is $23,900, we can find the value of stock B by subtracting:

Value of stock B = Total portfolio value - Value of stock A
Value of stock B = $42,900 - $23,900
Value of stock B = $19,000

Now we can find the portfolio weight of stock B:

Portfolio weight of stock B = Value of stock B / Total portfolio value
Portfolio weight of stock B = $19,000 / $42,900
Portfolio weight of stock B = 0.443 or 44.3%

Therefore, the best choice is B, with a portfolio weight of 44.3%.

Travis Has a Portfolio Consisting of Two Stocks, a and B