Stocks A and B have alphas of .01 and betas of .90.Stock A has a residual variance of .020 while stock B has a residual variance of .016.If stock A represents 2% of an active portfolio,stock 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 Stocks A and B have alphas of .01 and betas of .90.Stock A has a residual variance of .020 while stock B has a residual variance of .016.If stock A represents 2% of an active portfolio,stock B should represent __________ of an active portfolio.
A) 1.6%
B) 2.0%
C) 2.2%
D) 2.5%

Stocks a and B Have Alphas of