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%

Question

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The Answer of 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%

Shares a and B Have Alphas of