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Consider the following information about the components of a portfolio: A B C Weight 30% 40% 30% Standard deviation of the error/residual term (e) 25%

Consider the following information about the components of a portfolio: A B C Weight 30% 40% 30%

Standard deviation of the error/residual term (e) 25% 35% 30%

Beta 1.4 1.2 .8 Assume that the standard deviation of the market is 20%.

A. what is the Residual standard deviation of the portfolio (ep)?

B. What is portfolio Beta?

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