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So obviously it's going to turn out to have half the price.
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That's the fundamental principle.
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We're doing it in the most trivial case,
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but it's the most fundamental principle of finance that if
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you've got two assets and they're basically the same up to
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scale then their prices have to be the same up to scale.
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Who's going to bother to buy alpha if it costs the same
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amount as beta when it only produces half as much?
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Yes?
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Is that the same thing as saying that their
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yields will converge, that equation?
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Prof: Well, it is something like that,