If You Own 1,000 Shares of Alaska Corporation at $19

question 6

Multiple Choice

If you own 1,000 shares of Alaska Corporation at $19.95, 250 shares of Best Company at $17.50, and 250 shares of Motor Company at $2.50, what are the portfolio weights of each stock?

• A) Alaska = 0.1000, Best = 0.2500, Motor = 0.2500
• B) Alaska = 0.4994, Best = 0.4380, Motor = 0.0626
• C) Alaska = 0.7996, Best = 0.1754, Motor = 0.0250
• D) Alaska = 0.1995, Best = 0.1750, Motor = 0.0250

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Definitions:

Return to Risk Ratio

A measure that compares the expected returns of an investment to the risk or volatility associated with it.

Index Fund

A type of mutual fund or exchange-traded fund (ETF) designed to follow or track the components of a market index, like the S&P 500.

PHStat

PHStat is a software program used for statistical analysis, particularly in conjunction with Microsoft Excel.

Variance

A measure of the dispersion or spread of a set of values, calculated as the average of the squared differences from the mean.