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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. Calculate the total variance for an increase of 0.10 in its beta.
A. |
Total variance will increase from 2,500 to 2,664. |
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B. |
Total variance will increase from 2,500 to 2,774. |
|
C. |
Total variance will increase from 2,600 to 2,664. |
|
D. |
Total variance will increase from 2,600 to 2,774. |
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