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The standard deviation of the market-index portfolio is 10%. Stock A has a beta of 2.50 and a residual standard deviation of 20%. Required: a.
The standard deviation of the market-index portfolio is 10%. Stock A has a beta of 2.50 and a residual standard deviation of 20%.
Required:
a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations.)
b. Calculate the total variance for an increase of (expression error) percentage points in its residual standard deviation. (Do not round intermediate calculations.)
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