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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: AA=2.45+.55RN+eAFB=2.4S+1.30RW+eBN=25%;R5quareA=0.17;R-squares=0.11 Break down the variance of

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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: AA=2.45+.55RN+eAFB=2.4S+1.30RW+eBN=25%;R5quareA=0.17;R-squares=0.11 Break down the variance of each stock to the systematic and firm-specific components

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