Question: Problem 8-12 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.2% +

Problem 8-12 Suppose that the index model for stocks A and

Problem 8-12 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.2% + 0.80RM + EA RB = -2.2% + 1.2RM + eB OM 24%; R-square A = 0.16; R-squarep = 0.12 What is the covariance between each stock and the market index? (Calculate using numbers in decimal form, not percentages. Do not round your intermediate calculations. Round your answers to 3 decimal places.) Covariance Stock A Stock B

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