An investor owns $3,000 of Adobe Systems stock, $6,000 of Dow Chemical, and $7,000 of Office Depot. What are the portfolio weights of each stock? (Round your answers to 4 decimal places.)

Respuesta :

Answer:

0.1875; 0.375; 0.4375

Explanation:

Given that,

Adobe Systems stock = $3,000

Dow Chemical = $6,000

Office Depot = $7,000

Total Value of stock:

= Adobe Systems stock + Dow Chemical + Office Depot

= $3,000 + $6,000 + $7,000

= $16,000

Portfolio weights of Adobe Systems stock:

= Value of Adobe Systems stock ÷ Total Value of stock

= $3,000 ÷ $16,000

= 0.1875

Portfolio weights of Dow Chemical stock:

= Value of Dow Chemical stock ÷ Total Value of stock

= $6,000 ÷ $16,000

= 0.375

Portfolio weights of Office Depot stock:

= Value of Dow Chemical stock ÷ Total Value of stock

= $7,000 ÷ $16,000

= 0.4375

Answer:

The portfolio weights of each stock:

Adobe Systems stock [tex]=0.1875[/tex];

Dow Chemical [tex]=0.0375[/tex];

Office Depot [tex]=0.4375[/tex]  

Explanation:

Given:

Adobe Systems stock  [tex]= \$ 3,000[/tex]

Dow Chemical [tex]= \$ 6,000[/tex]

Office Depot [tex]= \$ 7,000[/tex]

Step 1:

Total Value of stock:

[tex]=[/tex] Adobe Systems stock [tex]+[/tex] Dow Chemical

[tex]= \$ 3,000 + \$ 6,000 + \$ 7,000[/tex]

[tex]= \$ 16,000[/tex]

Step 2:

Portfolio weights of particular stock:  

[tex]= \frac{Value of particular stock }{Total Value of stock}[/tex]

Adobe Systems stock

[tex]= \frac{\$ 3000}{\$ 16000}[/tex]

[tex]= 0.1875[/tex]

Dow Chemical stock

[tex]= \frac{\$ 6000}{\$ 16000}[/tex]

[tex]= 0.0375[/tex]

Office Depot stock

[tex]= \frac{\$ 7000}{\$ 16000}[/tex]

[tex]= 0.4375[/tex]

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