FUI Prazer se 4

KEY
CGEP .CA

c ConCx
yJ ECCX EGI CY ECYI

ECA ECA ECA

f TICK ECA Gi Elyl

Variance

Var x Con Xix

ELA EAST

ELA ECA

f Cm EE
E
Sample Covariance

ECA
Cala y EI CREED Yi

SEE VINE
Vara
f3 EI Ki ECA

VENCE E a
Perfio

T
EI wi x t
Izzy Ewing rejeitei

VAIE E A 2 ASESPortfolio

O mix of não TE
2xwaxwatpaptax .BE

aiii
 a Variance measures the total usa of a

RISK
AND IS S CURITY
HAS BOTH UNIQUE AND
A MEAGRE OF STAND ALONE

MARKET IN
USA TOTAL

RISK A WELL

DIVERSIFIED PORTFOLIO UNIQUE RISKS TEND TO CANCEL

EACH OTHER OUT AND ONLY THE MARKET RISK REMAINS

BETA IS A MEAGRE O MARKET RISK AND IS USEFUL IN

THE CONTEXT OF A WELL DIVERSIFIED PORTFOLIO BETA
MEASURES THE SECURITY RETURNS TO CHANGES IN MARKET TE
TURNS THE MARKET PORTFOLIO HAS A BETA OF ONE

b If he HOLD LONG POSITIONS IN BOTH STOCKS THE

CORRELATION COEFFICIENT THAT ONES THE MAXIMUM DEDUCT

IN USK IS 1
De

C Va 8 10 22
Na 6 18 24

RECALL THAT

a
EFE
 WHERE

Contra a f FÊ CREED NEED

AND VAR Cm
EIChi ECRÃ
FIRST WE FIND THAT

ECA 008 0.110.22 0.08

Ix
E Cm 0.06 1018 10.24
0.16
Tus

Con rap É Cra 008 mi 0.16

0.16 1 0.10 4 0.02 0.02 1 0.14.0081

0.013s

Var Cm
I E Chi 0.16

E 005 0.024 0.08

0.0084
 HENCE

GE
1
IPa jjfp
D

d pão
93 0.35

Te 0.20

FIRST WORK OUT THE Covariance BETWEEN STOCK

B AND THE MARKET

a
Cor PB Pr Para Os
0.8 0.35 0.20
0.056

Titus

a
aiii mãe
 Beija D

Ela so a 20

ECB 15 TB_40
a
Pa B 0.5

Ela 12

IF WE ALLOCATE SHARES A AND 1 LOTTE

B RESPECTIVELY WE
Portfolio to ASSETS A AND

MUST HAVE

xx Ela G a ECRA Ela

1 2 0.15 0.12
D X a 0.10

Iii
 KNOWING THAT WE CAN CALCULATE THE PORTAO

Variance

Tj x 75 61 2 024 2.2.61 2 papaB

0.6 0.25 0.4 0.4 2 0.670.4705 0.270

0091
HENCE THE Portfolio STANDARD DEVIATIONIS

a_ ftp.VO 059
b Tp 24.33

Do
 Os 29.32

O 29.27

Ou 15

a
Pa as 0.59

É 0.5 0.2932 4 0.5 0.2927

2 05 0.5 0.59 a 0.2932 0.2927

0.0682

ftp.VOF RS
26

b IR ne assore THATTreasury Bros are completa

Resr FREE THIS MEANS THAT

O
FB
PTB é O
 HENCE

0.2927
tá 13 0.2932 31

2 0.59 0.2932 0.2927

13 13

0.0303

D
ftp 17.4 Do

OF THE INVESTMENT WITH

C FINANCING HALF
MEANS THAT FOR EACH 2
RISK FEE BORROWING
HE BORROWS 1 AND INVESTS 1
DOLLARS HE INVESTS

FROM HIS OWN WEALTH

PORTFOLIO
This is EQUIVALENT TO HOLDING A
THAT INVESTS SOL
WITH WEIGHT 2 ON A PORTFOLIO

STOCK AND WEIGHT I ON TREASURY BAUS

IN EACH
1 WHICH IS THE
NOTE THAT THESE HEIGHTS UM TO

AMOUNT OF HIS WEALTH THAT IS INVESTED

 GEN O we must Have
THAT Az

F 2 rei Es JÁ
FÉ
2 2 6 1
foi Tase

D fp TT
Xzxo 2612

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