Check (3.1). Reformulate it in terms of individual asset betas. What can we say about (3.2) for the minimum variance portfolio? Equal-weight benchmarks try to achieve diversification by investing...

Check (3.1). Reformulate it in terms of individual asset betas. What can we

say about (3.2) for the minimum variance portfolio?

Equal-weight benchmarks try to achieve diversification by investing equal

amounts into all assets. However, equal amounts do not lead to equal risk

contributions. Construct an equal risk benchmark; (i.e., a portfolio where

the percentage contribution for each asset equals the inverse of the number

of assets). How would you evaluate such a concept theoretically and

practically?