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    Intuitive understanding of Beta calculation with cross volatility

    Hello, In the CAPM/MPT chapter, I was trying to get an intuitive understanding of how Beta is computed, without using maths (just like CAPM can be expressed as price of time + price of risk * Quantity of risk). Covariance upon variance can be understood, but I was wondering what an intuitive...
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    Beta and Hedge Ratio

    Hi all, I couldn't find a relevant thread on this, but apologies if this has been asked before - I've got myself in to a bit of a quandary around the calculation of "beta", or as we know, the slope of the regression line, for instance between an asset and the hedge. The typical methodology I...
  3. Nicole Seaman

    P1.T1.20.8. Modern portfolio theory (MPT)

    Learning objectives: Explain modern portfolio theory and interpret the Markowitz efficient frontier. Understand the derivation and components of the CAPM. Describe the assumptions underlying the CAPM. Interpret the capital market line. Apply the CAPM in calculating the expected return on an...
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    GARP.FRM.PQ.P1 Increasing Beta question

    A fund manager has a USD 100 million portfolio with a beta of 0.75. The manager has bullish expectations for the next couple of months and plans to use futures contracts on the S&P500 to increase the portfolio´s beta to 1.8. Given the following information, which strategy should the fund manager...