Problem 3. Let V be covariance matrix and VR be the residual covariance matrix. Let hp be your portfolio holdings and let hp be the benchmark holdings. Recall that your residual holdings hPR are defined to be where Bp is the beta of your portfolio with respect to the benchmark B Prove that the following two expressions for residual variance are equal to each other and Problem 3. Let V be covariance matrix and VR be the residual covariance matrix. Let hp be your portfolio holdings and let hp be the benchmark holdings. Recall that your residual holdings hPR are defined to be where Bp is the beta of your portfolio with respect to the benchmark B Prove that the following two expressions for residual variance are equal to each other and