Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

R_A= 3.6% + 1.20R_M+e_A

R_B= 1.6% + 1.50R_M+e_B

_M= 16%;R-square_A= 0.25;R-square_B= 0.15

Assume you create a portfolioQ, with investment proportions of 0.40 in a risky portfolioP, 0.35 in the market index, and 0.25 in T-bill. PortfolioPis composed of 70% StockAand 30% StockB.

1.	What is the standard deviation of portfolioQ?(Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.

Standard deviation

%

2.	What is the beta of portfolioQ?(Do not round intermediate calculations.Round your answer to 2 decimal places.)

Portfolio beta

3.	What is the "firm-specific" risk of portfolioQ?(Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 4 decimal places.)

Firm-specific

4.	What is the covariance between the portfolio and the market index?(Calculate using numbers in decimal form, not percentages.Do not round intermediate calculations. Round your answer to 2 decimal places.)

Covariance