What would make for a larger increase in stock-s variance, Basic Statistics

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What would make for a larger increase in stock-s variance

The standard deviation of the market-index portfolio is 15%. Stock A has a beta of 2.2 and a residual standard deviation of 25%.

a. What would make for a larger increase in the stock's variance: an increase of .2 in its beta or an increase of 3.84% (from 30% to 33%) in its residual standard deviation?

b. An investor who currently holds the market-index portfolio decides to rudce the portfolio allocation to the market index to 90% and to invest 10% in stock A. Which of the changes in (a) will have a greater impact on the portfolio's standard deviation?

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Basic Statistics: What would make for a larger increase in stock-s variance

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Basic Statistics: What would make for a larger increase in stock-s variance

Reference No:- TGS097592

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Recent Questions Asked Basic Statistics

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Basic Statistics: What would make for a larger increase in stock-s variance

Reference No:- TGS097592

Recent Questions Asked Basic Statistics

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