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Suppose that the index model for two Canadian stocks HD and ML is estimated with the following results: RHD =0.02+0.80RM+eHD R-squared =0.6                 RML =-0.03+1.50RM+eML R-squared =0.4 σM =0.20 where M is S&P/TSX Comp Index and RX is the excess return of stock X.  d. For portfolio P with investment proportion of 0.3 in HD and

Suppose that the index model for two Canadian stocks HD and ML is estimated with the following results: RHD =0.02+0.80RM+eHD R-squared =0.6                 RML =-0.03+1.50RM+eML R-squared =0.4 σM =0.20 where M is S&P/TSX Comp Index and RX is the excess return of stock X.  d. For portfolio P with investment proportion of 0.3 in HD and

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
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INV 2-3d

Suppose that the index model for two Canadian stocks HD and ML is estimated with the following results:

RHD =0.02+0.80RM+eHD

R-squared =0.6

                RML =-0.03+1.50RM+eML

R-squared =0.4

σM =0.20

where M is S&P/TSX Comp Index and RX is the excess return of stock X. 

d. For portfolio P with investment proportion of 0.3 in HD and 0.7 in ML, calculate the systematic risk, non-systematic risk, and total risk of P.

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