Question
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.75 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 1.75 and a residual standard deviation of 30%.
a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Total variance:
b. Calculate the total variance for an increase of 5.71% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Total variance:
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
