Question: The following are estimates for two stocks. Stock Expected Return Beta firm-specific Standard Deviation A 0.13 0.68 0.35 B 0.24 1.35 0.41 The market index

The following are estimates for two stocks.

Stock	Expected Return	Beta	firm-specific Standard Deviation
A	0.13	0.68	0.35
B	0.24	1.35	0.41

The market index has a standard deviation of 0.18 and the risk-free rate is 0.05. Suppose that we were to construct a portfolio with proportions: Stock A 0.31 Stock B 0.42 The remaining proportion is invested in Tbills.

Compute the nonsystematic standard deviation of the portfolio.

Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

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