Shares a and B Have Alphas of

question 8

Multiple Choice

Shares A and B have alphas of .01 and betas of .90. Share A has a residual variance of .020 while share B has a residual variance of .016. If Share A represents 2% of an active portfolio, share B should represent ________ of an active portfolio.

• A)1.6%
• B)2.0%
• C)2.2%
• D)2.5%

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Definitions:

True Purpose

Refers to the underlying or genuine intention behind an action or existence.

Supportive Friends

Individuals who provide emotional, social, and practical support to someone.

Happier and Healthier

A state of increased well-being characterized by positive emotions and physical wellness.

Intellectual Abilities

Intellectual abilities refer to the diverse range of cognitive functions, including problem-solving, logical reasoning, creativity, and memory, that contribute to an individual's ability to learn, adapt, and engage in mentally demanding tasks.