In: Finance
You have a portfolio of two stocks that has a total value of $32,000. The portfolio is 44 percent invested in Stock J. If you own 205 shares of Stock K, what is Stock K's share price?
- Total Value of the Portfolio= $32,000
- % of Investment in Stock J = 44%
% of Investment in Stock K = 1− % of Investment in Stock J
= 1 − 0.44
= 0.56
First, Calculating the Total Investment in Stock K:-
Total Investment in Stock K = Total Value of the Portfolio∗% of Investment in Stock K
= $32,000×0.56
= $17,920.00
- Number of Shares owned in Stock K = 205
Now, Calculating the Stock's Price per share:-
Stock′s Price per share = Total Investment in Stock K/Number of Shares owned in Stock K
= $17,920205
= $87.41
So, the Stock's Price per share is $87.41.
So, the Stock's Price per share is $87.41.