Consider the two $($excess return$)$ index$-$model regression results for stocks A and B$.$ The risk$-$free rate over the period was $5\%,$ and the market$$s average return was $13\%.$ Performance is measured using an index model regression on excess returns.

Stock A Stock B

Index model regression estimates $1\%+1\mathrm{.}2($rM $$ rf$)2\%+0\mathrm{.}8($rM $$ rf$)$

R$-$square $0\mathrm{.}6050\mathrm{.}451$

Residual standard deviation, $\backslash$sigma $($e$)10\mathrm{.}8\%19\mathrm{.}6\%$

Standard deviation of excess returns $22\mathrm{.}1\%25\mathrm{.}9\%$

Required:

a$.$ Calculate the following statistics for each stock: $($Do not round intermediate calculations. Round your answers to $4$ decimal places.$)$

b$.$ Which stock is the best choice under the following circumstances?