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6. value: 2.00 points The standard deviation of the market index portfolio is 30% Stock A has a beta of 17 and a residual standard
6. value: 2.00 points The standard deviation of the market index portfolio is 30% Stock A has a beta of 17 and a residual standard deviation of 35%. Requirement 1: (a) Calculate the total variance for an increase of 20 in its beta? (Round your answer to 4 decimal places.) Total variance (b) Calculate the total variance for an increase of 3% in its residual standard deviation? (Round your answer to 4 decimal places.) Total variance Requirement 2 An investor who currently holds the market-index portfolio decides to reduce the portfolio allocation to the market index to 90%, and to invest 10% in stock A Which of the changes will have a greater impact on the portfolio's standard deviation? (Click to select)
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