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The standard deviation of the market-index portfolio is 25%. Stock A has a beta of 1.60 and a residual standard deviation of 35%. a. Calculate

The standard deviation of the market-index portfolio is 25%. Stock A has a beta of 1.60 and a residual standard deviation of 35%.

a. Calculate the total variance for an increase of 0.20 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Total variance %-Squared

b. Calculate the total variance for an increase of 5.62% in its residual standard deviation.

(Do not round intermediate calculations. Round your answer to the nearest whole number.)

Total variance %-Squared

ReferenceseBook & Resources WorksheetLearning Objective: 06-05 Use index models to analyze the risk and return characteristics of securities and portfolios.

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