Question

Suppose you have $600 in your account. You bought 2 shares of Apple stock (AAPL) at $204/share and 1 share of Microsoft stock (MSFT) at $102/share. ___, the weight of MSFT is ____, and the weight of cash ____

The weight of AAPL in your portfolio is:

The weight of MSFT in your portfolio is:

The weight of Cash in your portfolio is:

Please give your answers as two decimals. For example "fifty percent" would be "0.50".

Answer 1

A	B	C	D	E	F	G	H	I
2
3		Total amount in account	$ 600.00
4		Amount invested in apple stock (AAPL)	$ 408.00	=2*204
5		Amount invested in 1 share of Microsoft (MSFT)	$ 102.00	=1*102
6		Amount of cash in hand	$    90.00	=D3-D4-D5
7
8		Weight of AAPL in the portfolio	=Amount invested in AAPL portfolio/Total amount invested
9			=$408 / $600
10			0.68	=D4/D3
11
12		Weight of MSFT in the portfolio	=Amount invested in MSFT portfolio/Total amount invested
13			=$102 / $600
14			0.17	=D5/D3
15
16		Weight of Cash in the portfolio	=Amount invested in Cash portfolio/Total amount invested
17			=$90 / $600
18			0.15	=D6/D3
19
20		Hence,
21		Weight of AAPL in the portfolio	0.68
22		Weight of MSFT in the portfolio	0.17
23		Weight of Cash in the portfolio	0.15
24