Consider a value-weighted market index that includes the two companies shown in the table. You form a portfolio to mimic the index on Day 1. The mimic portfolio is designed to earn the same return as the index
What is the portfolio weight for Company 1?
Company 1 Company 1 Company 2 Company 2
Day Price # of Shares Price # of Shares
1 $6.62 200 $10.00 750
2 $7.24 200 $10.54 750
A) 15%
B) 16%
C) 17%
D) 18%
E) 19%
A
Business
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