Question
Asked Nov 3, 2019
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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.)

  Portfolio Weights
Adobe System  
Dow Chemical  
Office Depot  
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Expert Answer

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Step 1

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

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Step 2

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%

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Step 3

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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