luda002

My thought is to know the basics but skip formula details.

Active portfolio - just a few high alpha or negative alpha stocks
market portfolio -
risk free asset

Weights of active based on alpha and unsystematic risk

Small number of assets in active portfolio. you can short negative alpha's.

If you are confident in alpha forecasts then use higher weightings, but if you aren't then ease off the weight.

What else should we focus on for basics