Suppose that the index model for stocks A and B is estimated from excess returns with the following results. In particular, the coefficient $$a$=53$

Ra $=\%3+$aRm $+$ ea

Rb$=-2\%+1\mathrm{.}2$Rm $+$eb

R$\_$squared$\_$A $=0\mathrm{.}20$ ; R$\_$squared$\_$B $=0\mathrm{.}12,$ standard deviation of M : $\%20$

a$.$ What is the standard deviation of each stock?$$

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

c$.$ What are the covariance and correlation coefficient between the two stocks?$$

d$.$ What is the covariance between each stock and the market index?$$

e$.$ For portfolio P with investment proportions of $0\mathrm{.}60$ in A and $0\mathrm{.}40$ in B$,$ rework parts $($a$),($b$)$ and $($d$).$f$.$ Rework part $($e$)$ for portfolio Q with investment proportions of $0\mathrm{.}50$ in P$,0\mathrm{.}30$ in the market index, and $0\mathrm{.}20$ in T$-$bills.