Question
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R A = 3.8% + 1.25
| 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% + 1.60RM + eB | |
| M = 18.0%; R-squareA = 0.24; R-squareB = 0.18 |
| What is the covariance between each stock and the market index? (Calculate using numbers in decimal form, not percentages. Do not round your intermediate calculations. Round your answers to 3 decimal places.) |
| Covariance | |
| Stock A | |
| Stock B |
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Exploring Public Relations And Management Communication
Authors: Ralph Tench, Stephen Waddington
5th Edition
1292321741, 9781292321745
