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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 5.0% + 1.30RM +
Suppose that the index model for stocks A and B is estimated from excess returns with the following results:
RA = 5.0% + 1.30RM + eA
RB = 2.0% + 1.6RM + eB
M = 20%; R-squareA = 0.20; R-squareB = 0.12
What is the standard deviation of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Stock A:
Stock B:
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