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Memphic Memphic
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6 years ago
Suppose that you have invested $30,000 invested in the market portfolio.  Then the amount that you have invested in Wyatt Oil is closest to:
A) $4500
B) $6000
C) $7715
D) $9000
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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Replies
wrote...
6 years ago
A
Explanation:  A) 
Calculations          B × C    D/1950
Stock   Price per
Share   Number of Shares
Outstanding
(Millions)   Market
Cap   Weight
Taggart Transcontinental   $15.60   25   $390.00   0.2
Rearden Metal   $13.00   45   $585.00   0.3
Wyatt Oil   $29.25   10   $292.50   0.15
Nielson Motors   $26.25   26   $682.50   0.35
Total         $1950.00   

AmountWO = WeightWO × AmountMarket = .15 × $30,000 = $4500
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