If You Own 400 Shares of Xerox at $15

question 72

Multiple Choice

If you own 400 shares of Xerox at $15.00, 500 shares of Qwest at $10.00, and 350 shares of Liz Claiborne at $45.00, what are the portfolio weights of each stock?

• A) weight of Xerox: 22.43 percent, weight of Qwest: 11.09 percent, weight of Liz Claiborne: 58.88 percent
• B) weight of Xerox: 34.67 percent, weight of Qwest: 16.69 percent, weight of Liz Claiborne: 48.64 percent
• C) weight of Xerox: 22.43 percent, weight of Qwest: 18.69 percent, weight of Liz Claiborne: 58.88 percent
• D) weight of Xerox: 36.98 percent, weight of Qwest: 61.07 percent, weight of Liz Claiborne: 1.95 percent

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Definitions:

Net Welfare Loss

The loss in social welfare, usually due to inefficiencies in the market system or government intervention policies that lead to misallocation of resources.

Specific Tariff

A fixed fee imposed by a government on imported or exported goods, based on physical units like weight or quantity.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

World Price

The price of a good that prevails in the global market for internationally traded goods.