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%.

a-1.Calculate the total variance for an increase of 0.10 in its beta?(Do not round intermediate calculations. Round your answer to 4 decimal places.)

Total variance?

a-2.Calculate the total variance for an increase of 2.62% in its residual standard deviation?(Do not round intermediate calculations. Round your answer to 4 decimal places.)

Total variance?

b.An investor who currently holds the market-index portfolio decides to reduce the portfolio allocation to the market index to 90% and to invest 10% in stock A. Which of the following changes will have a greater impact on the portfolio's standard deviation?

Increase of 2.62% in residual standard deviation.Increase of .10 in beta.