Consider the two $($excess return$)$ index model regression results for A and $B$ :

$R_A=1\mathrm{.}5\%+1\mathrm{.}7R_M$

$R-$square $=0\mathrm{.}622$

Residual standard deviation $=12\%$

$R_B=-2\mathrm{.}4\%+1\mathrm{.}3R_M$

$R-$square $=0\mathrm{.}468$

Residual standard deviation $=9\mathrm{.}8\%$

Required:

a$.$ Which stock has more firm$-$specific risk?

b$.$ Which stock has greater market risk?

c$.$ For which stock does market movement explain a greater fraction of return variability?

d$.$ If $r_f$ were constant at $5\mathrm{.}5\%$ and the regression had been run using total rather than excess returns, what would have been the

regression intercept for stock $A?$

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Required A

If $r_f$ were constant at $5\mathrm{.}5\%$ and the regression had been run using total rather than excess returns, what would have been

the regression intercept for stock $A?$

Note: Negative value should be indicated by a minus sign. Round your answer to $2$ decimal places.