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Suppose that the index model for stocks A and B is estimatedfrom excess returns with the following results:RA = 3.8% + 1.2RM + eARB =

Suppose that the index model for stocks A and B is estimatedfrom excess returns with the following results:RA = 3.8% + 1.2RM + eARB = -1.8% + 1.6RM + eB?M = 18%; R-squareA = 0.24; R-squareB = 0.1 2 answers

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