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- The (index model has been estimated for stocks A and B with the following results: M=0.3A=0.20B=0.30 The correlation between the returns on stocks A

- The (index model has been estimated for stocks A and B with the following results: M=0.3A=0.20B=0.30 The correlation between the returns on stocks A and B is - Formula: corr =ABABM2 - Answer: corr =(0.81.20.30.3)/(0.20.3)

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