3 Suppose the index model for stocks A and B is estimated from the excess returns with the following results TA 2 0 7RM CA, TB 2 1 5RM B, OM 20 , and the regression R of stocks A and B is 0 30 and 0 25, respectively Answer the following questions Total 20 marks (a) What is the variance of each sto...

Solution a The variance of each stock can be calculated using the formula Variance 2 1 R where is th ...

3. Suppose the index model for stocks A and B is estimated from the excess returns...

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Statistics For Business & Economics

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3. Suppose the index model for stocks A and B is estimated from the excess returns...

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Statistics For Business & Economics

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