two quick questions

  1. In stock hedging with future, when effective beta (% change in value of portfolio / % change in value of index) is bigger than target beta, how to understand " portfolio beta is greater than expected and future beta will be less than expected" ? On SchweserNotes Book 4, page 93,

I think it’s because it’s short future contract, future beta will be less than expected. Need to confirm if we are long future contract and effective beta is greater than target beta, both portfolio beta and future beta can be bigger than expected ??

  1. why does misfit active risk contribute to true active return? original text from notes is “generate a level of true active return for misfit active risk”.