The "exposure" (i.e.the regression coefficient beta)is: Hint: Calculate the expression $\frac { \operatorname { Cov } ( P , S ) } { \operatorname { Var } ( S ) }$

Question

Quizplus · Accepted Answer

The exposure is the covariance between the portfolio return and the stock return divided by the variance of the stock return. In this case, the covariance is 7,500 and the variance is 1,000, so the exposure is 7,500 / 1,000 = 7.5.

The "Exposure" (I Cov⁡(P,S)Var⁡(S)\frac { \operatorname { Cov } ( P , S ) } { \operatorname { Var } ( S ) }Var(S)Cov(P,S)​

The "Exposure" (I $\frac { \operatorname { Cov } ( P , S ) } { \operatorname { Var } ( S ) }$