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Calculate the total variance for an increase

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The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.80 and a residual standard deviation of 30%.

a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

total variance:

b. Calculate the total variance for an increase of 8.54% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

total variance:

Reference no: EM132645535

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