Tangent (Efficient) Portfolio Weights
50%
30%
20%
Stock Prices (1M shares each)
$40
$40M
$30
$30M
$30
$30M
Investors
Demand vs. Supply by Stock
Maya
Leo
Ava
Bars = tangent weight × risky holdings
Tangent weights:
50%
30%
20%
Market weights:
40%
30%
30%
Market weights = each stock's market cap as a share of total market value