Question: Problem 8-11 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3.8% +

Problem 8-11 Suppose that the index model for stocks A and

Problem 8-11 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3.8% + 1.25RM + eA RB = -1.8% + 1.60RM + eB OM = 18%; R-squarea 0.24; R-squares = 0.18 = What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) Covariance Correlation coefficient

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