Suppose that we estimate the standard deviation of a portfolio P to be 10 , the covariance between P and the market portfolio to be 0 00576, and the standard deviation of the market portfolio to be 8 Find the idiosyncratic risk of P ...

We first have to compute the b ...

Suppose that we estimate the standard deviation of a portfolio P to be 10%, the covariance between

Question:

Suppose that we estimate the standard deviation of a P to be 10%, the covariance between P and the market to be 0.00576, and the standard deviation of the market to be 8%. Find the idiosyncratic risk of P.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...