Hi guys,
So today I ran into a pickle. I was on a kaplan Morning exam question which had an answer which you could derive from logic about aplha and unsystematic risk and which position in portfolio should have a larger weight.
My problem is that in the answer to the question, they use the weighting formula for TB model. I did not know these by heart…so I went back to the kaplan material and the prof note says …“Candidates are not responsible for memorizing formulas in this Topic review.”
So do I stick to the logic and forget the formulas or do I drill this in as well… (Schweser B5: pg 252).
Any suggestions?