Question
Consider a hypothetical value-weighted index created using the three stocks below: Stock Price o n 1/28/21 Price o n 7/28/21 Outstanding Shares (mil) on 1/18/21
Consider a hypothetical value-weighted index created using the three stocks below:
Stock | Price on 1/28/21 | Price on 7/28/21 | Outstanding Shares (mil) on 1/18/21 | Outstanding Shares (mil) on 7/28/21 |
A | $80 | $101 | 5000 | 5000 |
B | 100 | 84 | 2500 | 2500 |
C | 50 | 67 | 7000 | 7000 |
None of the stocks pay dividends.
On 1/28/2021, as a young asset manager, you were asked by a client to create a portfolio to track the said three-stock value-weighted index. You did exactly as ask and created this tracking portfolio with an initial investment of $104,000.
On 7/18/2020, you review the portfolio weights of the three stocks. What is the portfolio weight of Stock B?
Enter your answer as a percentage and round to the nearest 1%. E.g., if your answer is "0.12", enter "12%".
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