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Social ScienceAn investor owns $5,000 of Adobe Systems stock, $2,000 of Dow Chemical, and $9,000 of Office Depot. What are the portfolio weights of each stock? (Round your answers to 4 decimal places.) Portfolio WeightsAdobe System Dow Chemical Office Depot
An investor owns $5,000 of Adobe Systems stock, $2,000 of Dow Chemical, and $9,000 of Office Depot. What are the portfolio weights of each stock? (Round your answers to 4 decimal places.)
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Expert Answer
Hence, the total weight of portfolio is $16,000 is obtained by adding the investment made by the investor in Adobe system stock, Dow chemical stock and Office depot stock.
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Total portfolio weight = Weight of Adobe system Dow chemical +Office depot $5,000 $2,000+ $3,000 = $16,000
Hence, the portfolio weight of Adobe system stock is 31.25%, which is obtained by dividing the investment made in Adobe system stock with the total weight of portfolio.
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Investment in Adobe system stock x 100 Adobe system portfolio weight =- Total portfolio weight $5,000 -x100 $16,000 = 31.25%
Hence, the portfolio weight of Dow chemical stock is 12.5%, which is obtained by dividi...
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Investment in Dow chemical stock Total portfolio weight $2,000 Dow chemical portfolio weight x 100 -x100 $16,000 - 12.5%
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