Suppose we have two stocks A and B as well as the market portfolio and their return characteristics are given by the following: What is the standard deviation of each stock? Break down the variance of each stock to the systematic and firm-specific components. What is the covariance and correlation coefficient between the two stocks? What is the covariance between each stock and the market index? Are the intercepts of the two regressions consistent with the CAPM? Interpret their values. For portfolio P with investment proportions .60 in A and .40 in B, rework problems 1, 2, and 4. Rework problem 6 for portfolio Q with investment proportions of .50 in P, .30 in the market index, and .20 in T-bills. Suppose we have two stocks A and B as well as the market portfolio and their return characteristics are given by the following: What is the standard deviation of each stock? Break down the variance of each stock to the systematic and firm-specific components. What is the covariance and correlation coefficient between the two stocks? What is the covariance between each stock and the market index? Are the intercepts of the two regressions consistent with the CAPM? Interpret their values. For portfolio P with investment proportions .60 in A and .40 in B, rework problems 1, 2, and 4. Rework problem 6 for portfolio Q with investment proportions of .50 in P, .30 in the market index, and .20 in T-bills