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Calculate the value of the covariance and the correlation coefficient between the stock and bond funds 5. The standard deviation of the market index portfolio is 20%. Stock A has a beta of 1.5 and a residual standard deviation of 30%. ( LO65 ) a. What would make for a larger increase in the stock's variance: an increase of 0.15 in its beta or an increase of 3% (from 30% to 33% ) in its residual standard deviation? b. An investor who currently holds the market indes portfolio decides to reduce the portfolio allocation to the market index to 90% and to invest 10% in stock A. Which of the changes in (a) will have a greater impact on the portfolio's standard deviation