An investor plans to invest $10,000 of his equity. His plans are to buy $5,000 of Share A, sell short

An investor plans to invest $10,000 of his equity. His plans are to buy $5,000 of Share A, sell short

Question:

An investor plans to invest $10,000 of his equity. His plans are to buy $5,000 of Share A, sell short $2,000 of Share B, and buy $4,000 of Share C, and then either buy or sell short Share D as need to “balance” his sources and uses of funds. What will be his portfolio weight for Share D? 

Expert Answer:

Answer rating: 100% (QA)

To calculate the portfolio weight for Share D you need to determine the proportion of the investor s
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