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The standard deviation of the market-index portfolio is 40%. Stock A has a beta of 1.75 and a residual standard deviation of 50%. Required: a.
The standard deviation of the market-index portfolio is 40%. Stock A has a beta of 1.75 and a residual standard deviation of 50%. Required: a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations.) Answer is complete but not entirely correct. b. Calculate the total variance for an increase of 3 percentage points in its residual standard deviation. (Do not round intermediate calculations.)
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