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A portfolio comprises two​ stocks, A and​ B, with equal amounts of money invested in each. If stock​ A's stock price increases and that of stock B​ decreases, the weight of stock A in the portfolio will increase. True False

1 Answer

5 votes

Answer:

True

Step-by-step explanation:

When valuing the stock in portfolio, as for weighted average company considers the cost, whereas investor considers the market price, but in a portfolio of investor with weights as per market price the weight of stock increases provided other factors remain constant.

Therefore, here weight of Stock A will increase, accordingly as in comparison to Stock B its value has increased.

answered
User Frobbit
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