The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.50 and a residual standard deviation of 30%. Required: a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations.) Total variance 0.3925 b. Calculate the total variance for an increase of (expression error) percentage points in its residual standard deviation. (Do not round intermediate calculations.) Total variance

The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.50 and a residual standard deviation of 30%. Required: a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations.) Total variance 0.3925 b. Calculate the total variance for an increase of (expression error) percentage points in its residual standard deviation. (Do not round intermediate calculations.) Total variance

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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