In: Finance
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)
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%