Question
The standard deviation of the market-index portfolio is 10%. Stock A has a beta of 2.00 and a residual standard deviation of 20%. a. Calculate
The standard deviation of the market-index portfolio is 10%. Stock A has a beta of 2.00 and a residual standard deviation of 20%.
a.Calculate the total variance for an increase of 0.10 in its beta.(Do not round intermediate calculations. Round your answer to the 4 decimal places.)
Total variance?
b.Calculate the total variance for an increase of 1.00% in its residual standard deviation.(Do not round intermediate calculations. Round your answer to the 4 decimal places.)
Total variance?
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Analysis for Financial Management
Authors: Robert Higgins
11th edition
77861787, 978-0077861780
