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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 3.8% + 1.25RM + eA
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 3.8% + 1.25RM + eA RB = -1.8% + 1.6RM + eB OM = 18%; R-square 0.24; R-squareB = 0.18 What is the standard deviation of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Stock A Stock B Standard Deviation 0.27 % 0.33 %
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