Consider a single-index model. The index portfolio is M. There are 80 individual risky securities on the market.

(1) Calculate the total number of parameters to implement the single-index model. (7 marks)

(2) M = 0.15. The index model has been estimated for stock A with the following results: RA = -0.01 + 0.9RM + eA. (eA) = 0.12. Calculate The standard deviation of the return for stock A. (8 marks)

(3) Following (2), calculate the percentage of systematic risk in the total risk for stock A. (8 marks)