Q. Suppose you estimate the characteristic line for Stock X. You find that the standard deviation of X’s error term is 7%, X’s beta is 1.4, and the standard deviation of the market is 12%. What is the total standard deviation for Stock X? (Solved)
1. 18.2%
2. 19.0%
3. 23.8%
4. 30.5%
- a. 18.2%