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Suppose the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% + 0.7RM + eA

Suppose the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% + 0.7RM + eA RB = -2% + 1.2RM + eB ON = 20%; RSquared = 0.20; RSquared: = 0.12

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