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The standard deviation of stock returns for Stock A is 30%. The standard deviation of the market return is 20% and the correlation between Stock

The standard deviation of stock returns for Stock A is 30%. The standard deviation of the market return is 20% and the correlation between Stock A and the market is 0.75.

a. Calculate Stock A's beta.

b. In a bull market with rapidly increasing stock prices, will Stock A likely outperform or underperform the average stock? Why?

c. Is the beta of a diversified portfolio less stable or more stable than the beta of a single security? Why?

Please complete solution in excel.

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