Respuesta :
Answer: An individual's portfolio can be the market portfolio by holding each stock as a percentage of her portfolio equal to the proportion of its market capitalization to all stocks' market capitalization
Explanation:
Which of the following statements is correct?
An individual's portfolio can be the market portfolio by holding each stock as a percentage of her portfolio equal to the proportion of its market capitalization to all stocks' market capitalization this is said to be portfolio weights
portfolio weights equation wi = value of investment i -adds to 100percent
total value of portfolio
An individual's portfolio can be the market portfolio by holding each stock as a percentage of her portfolio equal to the proportion of its market capitalization to all stocks' market capitalization.
The portfolio weights could be computed by using the given equation:
[tex]w=\frac{I}{total portfolio value} *100[/tex]
Here, I is the investment value and w is portfolio weightage.
Therefore, the value of stock or investment is divided by the overall value that the portfolio has. Finally, multiply the result by 100 to bring the answer in percentage form.
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