Question: 12. Suppose that the index model for the excess returns of stocks A and B is estimated with the following results: Find the standard deviation

12. Suppose that the index model for the excess returns of

12. Suppose that the index model for the excess returns of stocks A and B is estimated with the following results: Find the standard deviation of each stock and the covariance between them. Suppose we form an equally weighted portfolio of A and B. What will be the nonsystematic standard deviation of that portfolio? Explain parts A and B in a manner that would be easily understood by someone lacking vour quantitative acumen A. B. 12. Suppose that the index model for the excess returns of stocks A and B is estimated with the following results: Find the standard deviation of each stock and the covariance between them. Suppose we form an equally weighted portfolio of A and B. What will be the nonsystematic standard deviation of that portfolio? Explain parts A and B in a manner that would be easily understood by someone lacking vour quantitative acumen A. B

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