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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R A = 3% + 1.00

Suppose that the index model for stocksAandBis estimated from excess returns with the following results:

R_A= 3% + 1.00R_M+e_AR_B= -1.0% + 1.30R_M+e_B_M= 18%;R-square_A= 0.27;R-square_B= 0.13

What are the covariance and correlation coefficient between the two stocks?

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