Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started