63. a f 6.4. 6.5 " consider the following two-factor model for the returns of three stocks. Assume that the factors and epsilons have means of zero. Also, assume the factors have variances of .01 and are uncorrelated with each other. .13 + 6151+ 4152 + 55,, = .15 + 21?, + 2132 + (5,, re: .07 + 51341\" 1132+ EC 5;\" u If var(EA) = .01 varGB) = 0.4 varc) = .02, what are the variances of the returns of the three stocks, as well as the covariances and correlations between them? What are the expected returns of the three stocks in exercise 6.3? Write out the factor betas, factor equations, and expected returns of the following portfolios: (1) A-portfolio of the three stocks in exercise 6.3 with $20,000 invested in stock A, -'-$20,000 '. \"invested in stock B, and $10,000 invested in " - stock C. ' ' (2) A portfolio consisting of the portfolio formed in part (1) of this exercise and a $3,000 short position in stock C of exercise 6.3. '