Question: Problem 8 - 1 1 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R

Problem 8-11
Suppose that the index model for stocks A and B is estimated from excess returns with the following results:
RA=2.5%+0.60RM+eA
RB=-1.5%+0.70RM+eB
M=()A()B
What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. using numbers in decimal form, not percentages. Round your answers to 4 decimal places.)
Covariance
Correlation coefficient
Problem 8-11 Suppose that the index model for stocks A and

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