Question

In: Finance

You buy 1000 shares of Rocketman Co. for $30 each and 2500 shares of Trumpology, Inc....

You buy 1000 shares of Rocketman Co. for $30 each and 2500 shares of Trumpology, Inc. for $10 each. What are the weights in your portfolio? (Show Calculations Please)

Solutions

Expert Solution

Investment in Rocketman Co. = 1000 shares X $30 per share = $ 30,000

Investment in Trumpology Inc. = 2500 shares X $10 per share = $ 25,000

Total investment = $ 30,000 + $ 25,000 = $ 55,000

Now, we can get respective weights of portfolio by following;

A.      Rocketman Co weight to Total investment = Investment in Rocketman / Total investment

                                                                            = 30000 / 55000 = 0.5454545454 = ~ 54.55%

B.      Trumpology Inc weight to Total investment = Investment in Trumpology / Total investment

                                                                            
                                                                              = 25000 / 55000 = 0.454545454545455 = ~45.45%

Total investment weight = 100% (54.55%+45.45%)

Rocketman Co. weight = ~ 54.55%

Trumpology Inc weight = ~ 45.45%


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