An Investor Owns $8,000 of Adobe Systems Stock, $5,000 of Dow

question 38

Multiple Choice

An investor owns $8,000 of Adobe Systems stock, $5,000 of Dow Chemical, and $3,000 of Office Depot. What are the portfolio weights of each stock?

• A) Adobe: 0.5, Dow Chemical: 0.31, Office Depot: 0.19
• B) Adobe: 0.5, Dow Chemical: 0.32, Office Depot: 0.18
• C) Adobe: 0.5, Dow Chemical: 0.13, Office Depot: 0.27
• D) Adobe: 0.5, Dow Chemical: 0.19, Office Depot: 0.31

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Definitions:

Marginal Social Cost

The additional cost to society as a whole from producing one extra unit of a good or service, including both private costs and externalities.

Rival

A competitor or adversary who is in competition for the same objective or for superiority in the same field.

Excludable

Describes a good or service for which it is possible to prevent non-paying customers from accessing it.

Marginal Social Benefit

The extra advantage that the entire society gains from using an additional unit of a product or service.