If a portfolio of the two assets has a beta of .99, what are the portfolio weights? (Do not round...

Question:

If a portfolio of the two assets has a beta of {eq}.99 {/eq}, what are the portfolio weights? (Do not round intermediate calculations and round your answers to {eq}2 {/eq} decimal places, e.g., {eq}32.16 {/eq}.)

Portfolio Beta:

The beta of a portfolio determines the degree of systematic risk (also known as market risk) of a portfolio. In general, the portfolio beta depends on the beta of assets in the portfolio as well as the distribution of value across assets.

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The answer depends on the beta of the two asses in the portfolio. Without loss of generality, suppose there are two assets: 1 and 2, and the beta of...

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Portfolio Weight, Return & Variance: Definition & Examples

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Chapter 12 / Lesson 1
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A portfolio can be designed in several different ways. It is important to understand the basics of a portfolio before building and managing one. In this lesson, we will go over the weight, return, and variance of a portfolio.


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