Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.5% + 0.95RM + eA RB = 1.8% + 1.10RM + eB M = 27%; R-squareA = 0.23; R-squareB = 0.11 Assume you create a portfolio Q, with investment proportions of 0.50 in a risky portfolio P, 0.30 in the market index, and 0.20 in T-bill. Portfolio P is composed of 60% Stock A and 40% Stock B.

a. What is the standard deviation of portfolio Q? b. What is the beta of portfolio Q? c. What is the "firm-specific" risk of portfolio Q? d. What is the covariance between the portfolio and the market index?

a. What Is the standard deviation of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round Intermediate calculations. Round your answer to 2 decimal places.) % Standard deviation b. What Is the beta of portfollo Q? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Portfolio beta c. What Is the "firm-specific" risk of portfolio Q? (Calculate using numbers in decimal form, not percenteages. Do not round Intermediate calculations. Round your answer to 4 decimal places.) Firm-specific d. What Is the covarlance between the portfollo 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