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The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. Calculate the
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. Calculate the total variance for an increase of 0.10 in its beta.
A. | Total variance will increase from 2,500 to 2,664. | |
B. | Total variance will increase from 2,500 to 2,774. | |
C. | Total variance will increase from 2,600 to 2,664. | |
D. | Total variance will increase from 2,600 to 2,774. |
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