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    Calculating Betas from Two Securities from a Market Portfolio

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    Assume that two securities A and B constitute the market portfolio. Their proportions and variance are 0.39, 160 and 0.61, 340, respectively. The covariance of the two securities is 190. Calculate the betas of the two securities.

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    Solution Preview

    Wa=0.39, VARa=160
    Wb=0.61, VARb=340

    First we calculate the ...

    Solution Summary

    The solution shows all the calculations necessary to arrive at the betas for the two securities.