Stock Market Cap OGG $50 HNL $72 KOA $18 LIH $10 Given the following information construct...
Stock Market Cap
OGG $50
HNL $72
KOA $18
LIH $10
Given the following information construct a value-weighted portfolio of the four stocks if you have $497,000 to invest. That is, how much of your $497,000 would you invest in each stock?
Homework Answers
|
Stock |
Market cap or market value |
|
OGG |
$50 |
|
HNI |
$72 |
|
KOA |
$18 |
|
LIH |
$10 |
|
Total |
$150 |
The investment is $497,000. To calculate the amount invested in each stock in value-weighted portfolio-
Value-weighted index = Total investment value of portfolio /total market cap of portfolio
Where,
Total investment value of the portfolio of four stocks = 497,000
total market cap of portfolio = 150
Therefore,
Value-weighted index =497,000 / 150 = 3313.33
The amount invested in each stock in value-weighted portfolio-
OGG = 3313.33 * $50 = $165,666.67
HNI = 3313.33 * $72 = $238,560
KOA = 3313.33 * $18 = $59,640
LIH = 3313.33 * $10 = $33,133.33
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