Problem 8-10

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

R_A = 3.2% + 1.1R_M + e_A

R_B = 1.4% + 1.25R_M + e_B

_M = 30%; R-square_A = 0.28; R-square_B = 0.12

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	1089	1406.25
Firm-specific

****not sure if those are correct im a little confused on the decimal form