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Pregunta	Respuesta
What formula would you use to calculate standard deviation of a portfolio given beta, E(r), sigma of firm specific and weights of each stock	(σ^2) =(β^2)(σ^2) +σ^2(e )
What is the security characteristic line?	The regression estimates describe a straight line with intercept alpha and slope beta. This describes the dependence of the excess return on changes in the state of the economy
What does a positive alpha mean when using the index model?	A positive alpha means security is providing a return above what it should given its market risk
What does a negative alpha mean in terms of using the index model?	A negative alpha means the security is providing a return lower than what it should given its market risk so we would short sell

Resumen del Recurso

	Creado por Nafisa Zahra hace más de 10 años