The index model has been estimated for stocks A and B with the following results. a) What

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The index model has been estimated for stocks A and B with the following results.

a) What is the covariance between returns on stocks A and B?

b) What is the standard deviation of stock A?

R_A= 0.05 + 0.45 * R_M + e_A

R_B = 0.06 + 0.77 * R_M + e_B

Please show work and round the answers to 4 decimal places.

Related Book For answer-question

Fundamentals Of Financial Management

ISBN: 9780357517574

16th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: Mar 02, 2024 11:22 AM

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The index model has been estimated for stocks A and B with the following results. a) What

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Fundamentals Of Financial Management

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