4-5

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: = 3.4% + 1.15RM + eA RA -1.5% + 1.30RM + eB RB OM 158; R-squareA = 0.26; R-squareB 0.16 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