Question
The index model has been estimated for stocks A and B with the following results: R A = 0.12 + 0.685 R M + e
The index model has been estimated for stocks A and B with the following results:
RA = 0.12 + 0.685RM + eA
RB = 0.04 + 1.536RM + eB
M = 0.345
(eA) = 0.20
(eB) = 0.10
What is the covariance between each stock and the market index? (Round your answers to 4 decimal places.)
| Stock A covariance | |
| Stock B covariance |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The Crowdfunding Handbook Raise Money For Your Small Business Or Start Up With Equity Funding Portals
Authors: Cliff Ennico
1st Edition
081443360X, 978-0814433607
