# Question: Repeat Problem 6 assuming now that firms B and C

Repeat Problem 6, assuming now that firms B and C are in the same industry.

Problem 6

Using the data from Problem 5, assume the model is now an Industry Index Model where I1 = Im and that I2 is now an industry index. Assuming that firms A and B are in the same industry, calculate the covariance of returns.

Problem 6

Using the data from Problem 5, assume the model is now an Industry Index Model where I1 = Im and that I2 is now an industry index. Assuming that firms A and B are in the same industry, calculate the covariance of returns.

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