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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 4 . 0 %
Suppose that the index model for stocks A and B is estimated from excess returns with the following results:
RA RM eA
RB RM eB
sigma M ; RsquareA ; RsquareB
What is the covariance between each stock and the market index?
Note: Calculate using numbers in decimal form, not percentages. For example use for calculation if standard deviation is provided as Do not round your intermediate calculations. Round your answers to nearest whole number.
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