Question: Problem 6 - 5 ( Algo ) The standard deviation of the market - index portfolio is 2 0 % . Stock A has a

Problem 6-5(Algo)
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.20 and a residual standard deviation of 50%.
Required:
a. Calculate the total variance for an increase of 0.20 in its beta.
Note: Do not round intermediate calculations.
Answer is complete but not entirely correct.
\table[[Total variance,0.5300
Problem 6-5(Algo) The standard deviation of the market-index portfolio is 20%.

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