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22 February, 05:14

he standard deviation of the market-index portfolio is 35%. Stock A has a beta of 1.40 and a residual standard deviation of 45%. a. Calculate the total variance for an increase of 0.20 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

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  1. 22 February, 06:49
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    = (45%) ^2 + (1.6*35%) ^2=0.5161

    This is the required total variance
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