How to solve X for beta/portfolio investment

  • MHB
  • Thread starter Luclucluc
  • Start date
In summary, to solve for A in this given situation, expand the multiplication, combine like terms, and then divide both sides by the coefficient of A to isolate the variable. The solution for A is approximately 0.95.
  • #1
1
0
bP = 1,0 = 1.48A + (0.72 * (1-A))

How does one solve for A in this given situation?
 
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  • #2
Luclucluc said:
bP = 1,0 = 1.48A + (0.72 * (1-A))

How does one solve for A in this given situation?

What is your equation?
Is it:
\begin{cases}
bP = 1.0 \\
1.0 = 1.48A + (0.72 * (1-A))
\end{cases}
Or is it:
\begin{cases}
bP = 1, \\
0 = 1.48A + (0.72 * (1-A))
\end{cases}
 
  • #3
Assuming that your equation is [tex]1.48A+ (0.72(1- A))= 0[/tex], first expand the multiplication: [tex]0.72(1- A)= 0.72- 0.72A[/tex].

That makes the equation [tex]1.48A+ 0.72- 0.72A= 0[/tex].

Now, combine the two "A" terms: 1.48A- 0.72A= (1.48- 0.72)A= 0.76A.

That makes the equation [tex]0.76A+ 0.72= 0[/tex].

Subtract 0.72 from both sides: [tex]0.76A= -0.72[/tex].

Finally, divide both sides by 0.76: [tex]A= -\frac{0.72}{0.76}= 0.9473[/tex]...
 
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