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The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.5 and a residual standard deviation of 30%. a. Calculate

The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.5 and a residual standard deviation of 30%.

a. Calculate the total variance for an increase of 0.15 in its beta. (Do not round intermediate calculations.)

b. Calculate the total variance for an increase of 3% (percentage points) in its residual standard deviation. (Do not round intermediate calculations.)

Ans is not 0.1989.

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