Question: Dear tutor , Please help to solve this problem. Please provide me the correct calculation. Best regards, Q21- Suppose that the index model for stocks
Dear tutor ,
Please help to solve this problem. Please provide me the correct calculation.
Best regards,
Q21- Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R. = 3.5% + 0.6511,, + an 4RB = -1.6% + 0.812,, + as on, = 21%,- R-squaren = 0.22,- RsquareB = 0.14 What is the standard deviation of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Standard Deviation Q22 - Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R; = 3.5% + 0.6512,, + e; R,3 = -1.6% + 0.8012,, + as on, = 21%; R-squaren = 0.22; RsquareB = 0.14 Break down the variance of each stock to the systematic and firm-specific components. (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) Risk for A Risk for B Systematic
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