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7 May, 18:21

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.)

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  1. 7 May, 19:35
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    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
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