The standard deviation of the market-index portfolio is 45%. Stock A has a beta of 1.20 and
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Question:
The standard deviation of the market-index portfolio is 45%. Stock A has a beta of 1.20 and a residual standard deviation of 55%.
a-1.Calculate the total variance of stock A if its beta is increased by 0.20?(Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 decimal places.)
a-2.Calculate the total variance of stock A if its residual standard deviation is increased by8.86% ?(Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 decimal places.)
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