Question 3 (12 Marks) a) You estimate the index model using monthly excess returns for two companies; Alpha Ltd and Omega Ltd. Selected results are as follows: RAlpha= 0.025 +0.926RM + Alpha Romaga = -0.004 + 1.5RM + eomaga O(eAlpha) = 0.07 (eomaga) = 0.076 Additionally, the annualised standard deviation of monthly market returns is 0.13025. Required: i) What is the standard deviation of the returns of both Alpha and Omega (2 Marks) ii) To what extent does the market explain the variance of returns, for Alpha and Omega? (2 Marks) iii) What is the correlation between the returns on Alpha and Omega? (2 Marks) iv) What is the covariance between each stock and the market index? (2 Marks)