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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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
