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Break down the variance of each stock to the systematic and firm-specific components. Stock Stock A Stock B Systematic Variance Firm-specific Variance Total Variance Systematic

Break down the variance of each stock to the systematic and firm-specific components.

Stock

Stock A

Stock B

Systematic Variance

Firm-specific Variance

Total Variance

Systematic Risk % (R2)

R(A)= 3%+.7R(m)+e(A)

R(B)= -2%+1.2R(m)+e(B)

(M)=20%;RSquared(A)=.20;RSquared(B)=.12

Can someone please explain? And are Systematic Risk and Systematic Variance the same? How can I calculate the Total Variance also? I am a little confused and we are not allowed to use excel to solve.. All work needs to be shown unfortunately. From what I understand, to find the Total Variance, you have to add the systematic risk with the Unsystematic. Where is that? Is risk=variance? Always written as a percentage?

Please help....

I am getting the following...

Systematic Var(A)=196;Stematic Var(B)=576

FirmSpecif(A)=784;FirmSpecif(B)=4224

Total Var..... NO CLUE FOR BOTH

SYSTEM RISK%(RSquared) (A)=280; (B)=480

is this correct?

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