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Consider a single-index model. The index portfolio is M. There are 30 individual risky securities on the market. (1) Calculate the total number of parameters

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Consider a single-index model. The index portfolio is M. There are 30 individual risky securities on the market. (1) Calculate the total number of parameters to implement the single-index model. (7 marks) (2) M=0.18. The index model has been estimated for stock A with the following results: RA=0.01+1.3RM+eA.(eA)=0.16. 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)

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