The standard deviation of the market-index portfolio is 10


The standard deviation of the market-index portfolio is 10%. Stock A has a beta of 2.70 and a residual standard deviation of 20%.

a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Total variance

b. Calculate the total variance for an increase of 1.33% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

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Financial Management: The standard deviation of the market-index portfolio is 10
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