The standard deviation of the market-index portfolio is 15


The standard deviation of the market-index portfolio is 15%. Stock A has a beta of 2.00 and a residual standard deviation of 25%.

a. Calculate the total variance for an increase of 0.20 in its beta. (Round your answer to 4 decimal places.)

b. Calculate the total variance for an increase of 3.53% in its residual standard deviation. (Round your answer to 4 decimal places.)

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Finance Basics: The standard deviation of the market-index portfolio is 15
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