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

RA $=2\mathrm{.}5\%+0\mathrm{.}95$RM $+$ eA

RB $=1\mathrm{.}8\%+1\mathrm{.}10$RM $+$ eB

$\backslash$sigma M $=27\%$; R$-$squareA $=0\mathrm{.}23$; R$-$squareB $=0\mathrm{.}11$

Break down the variance of each stock to the systematic and firm$-$specific components