What is the capitalization of the market portfolio?

Calculation of Market Portfolio Capitalization

To find the capitalization of the market portfolio:

Given that the market comprises 2300 shares of stock A and 2300 shares of stock B with share prices of $25 and $15 respectively.

The formula to calculate the capitalization of the market portfolio is:

Capitalization of market portfolio = Market capitalization of stock A + Market capitalization of stock B

Where:

Market capitalization of stock A = Number of shares of stock A × price per share of stock A

Market capitalization of stock B = Number of shares of stock B × price per share of stock B

Substitute the given values in the formula:

Market capitalization of stock A = 2300 shares × $25 = $57,500

Market capitalization of stock B = 2300 shares × $15 = $34,500

Therefore, the capitalization of the market portfolio is:

Capitalization of market portfolio = $57,500 + $34,500 = $92,000

Hence, the answer is A. $92,000