FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plz explain the formula used in this one! Stocks A and B have alphas of.01 and betas of .90. Stock A has a residual variance

image text in transcribed

Plz explain the formula used in this one!

Stocks A and B have alphas of.01 and betas of .90. Stock A has a residual variance of .020 while Stock B has a residual variance of .016. If stock A represents 2% of an active portfolio, stock B should represent of an active portfolio. A. 1 .6% B. 2.0% C. 2.2% D. 2.5% 010 IF'g ll',-ME( 02)= 0250 016 B01 020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Introduction To Institutions Investments And Management

Finance Introduction To Institutions Investments And Management

Authors: Ronald W. Melicher, Edgar A. Norton

11th Edition

0470004460, 978-0470004463

More Books

Students also viewed these Finance questions

Question

★★★★★
Several rods are brazed together to form the robotic guide arm shown which is attached to a ball-and-socket joint at O. Rod OA slides in a straight inclined slot while rod OB slides in a slot...

Answered: 1 week ago

Question

★★★★★
Let Bn be the event that a graph randomly generated according to G(n, p) model has at least one isolated node. Show that And conclude that for any P(Bn) n(1-p)n-1.

Answered: 1 week ago

Question

★★★★★
why you want to attend that specific graduate program (e.g., the match between the program and your research/practice interest areas);

Answered: 1 week ago

Question

★★★★★
A shareholders group, in lodging a protest, claimed that the mean tenure for a chief exective office (CEO) was at least nine years. A survey of companies reported in The Wall Street Journal found a...

Answered: 1 week ago

Question

★★★★★
QUESTION ONE (4+4=8 marks ) Below is an extract from the profit and loss statement of Woolworths for the financial year end 2022. Only three expense lines items have been disclosed. Consolidated...

Answered: 1 week ago

Question

★★★★★
26 Frisco, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2018. Fair...

Answered: 1 week ago

Question

★★★★★
Figure P.13.3 shows the flight envelope at sea-level for an aircraft with a wing span of 27.5m, average wing chord 3.05m, and total weight 196kN. The aerodynamic center is 0.915 m forward of the...

Answered: 1 week ago

Question

★★★★★
4. You elect extended repayment of your student loan and must pay $474.80/month. Your interest rate is 4.06%. Correct to the nearest dollar, how much did you borrow? 5. How much would you save, in...

Answered: 1 week ago

Question

★★★★★
Data and data analysis form important parts within the Lean Six Sigma (LSS) framework. Within a LSS project, what are data and data analysis not used for? 1)Diagnose the current process. 2) Find the...

Answered: 1 week ago

Question

★★★★★
Dan owned a farm. Most of his products are being supplied to different restaurants. Products include cow's milk, chicken egg, meat (chicken, pork, and beef). On the side, they also sell carrots,...

Answered: 1 week ago

Question

★★★★★
Task 1: A. Describe the operation of the following thermodynamic systems and their properties: (i) System (ii) Surroundings (iii) Open System (iv) Close System (v) Isolated System B. A large fraction...

Answered: 1 week ago

Question

★★★★★
5. Describe the pros and cons of five management development methods.

Answered: 1 week ago

Question

★★★★★
6. Do you think job rotation is a good method to use for developing management trainees? Why or why not?

Answered: 1 week ago

Question

★★★★★
2. John Santos is an undergraduate business student majoring in accounting. He just failed the first accounting course, Accounting 101. He is understandably upset. How would you use performance...

Answered: 1 week ago

Previous Question Next Question