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Suppose the market follows a single index model, where the index has standard deviation of 0.2. For a stock with beta of 2 and standard

Suppose the market follows a single index model, where the index has standard deviation of 0.2. For a stock with beta of 2 and standard deviation of 0.7, what is level of firm-specific risk?

0.4100

0.0900

0.3300

0.3000

0.5745

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