Calculate the total variance for an increase


Problem:

The standard deviation of the market-index portfolio is 50%. Stock A has a beta of 1.30 and a residual standard deviation of 60%.

Required:

Question 1: Calculate the total variance for an increase of 0.20 in its beta?

Question 2: Calculate the total variance for an increase of 10.71% in its residual standard deviation?

Note: Provide support for your rationale.

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Finance Basics: Calculate the total variance for an increase
Reference No:- TGS0880100

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