(20 points) Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% +.7 RM +eA RB = -2% + 1.2 RM +eb OM= 20%; R-square1 = .20; R-squareB = .12 a) What is the standard deviation of each stock? b) Break down the variance of each stock into its systematic and firm-specific components. What are the covariance and the correlation coefficient between the two stocks