1. Use the following data for Question 1) through 5). Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 3%+0.7RM+eA Rp= -2%+1.2Rm+eb Om=20% R-squarea=0.20; R-squarep=0.12 1)What is the standard deviation of each stock? 2)Break down the variance of each stock to the systematic and firm-specific components. 3) What are the covariance and correlation coefficient between the two stocks? 4)What is the covariance between each stock and the market index? 5)For portfolio P with investment proportion of 0.60 in A and 0.40 in B, rework Q1, Q2 and Q4