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Question 6. (10 points) The following are estimates for two stocks as a result of regression of each stock onto the stock market index.

Question 6. (10 points) The following are estimates for two stocks as a result of regression of each stock onto the stock market index. Stock A 11 B Residual Error, or risk % Expected Return % Beta 1.3 21 9 0.7 16 The stock market index has a standard deviation of 18%. Calculate the standard deviation for each stock. Calculate the covariance between stocks A, and B.

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