Question: Problem 32 Intro Assume that the single index model is valid. You've collected the following information about excess returns for two stocks, A and B,

Problem 32 Intro Assume that the single index model is valid.

Problem 32 Intro Assume that the single index model is valid. You've collected the following information about excess returns for two stocks, A and B, their residual standard deviations, and the standard deviation of the macroeconomic factor, M: RA= -0.1 +0.5 RM + ea RB = 0.2 + 1.3 RM + eb (CA) = 0.4 (b) = 0.2 OM = 0.15 . Part 1 Attempt 1/10 for 10 pts. What is the standard deviation of stock A? 3+ decimals Submit Part 2 Attempt 1/10 for 10 pts. What is the standard deviation of stock B? 3+ decimals Submit

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