Question
The index model has been estimated for stocks A and B with the following results: RA = 0.12 + 0.630RM + eA RB = 0.04
The index model has been estimated for stocks A and B with the following results:
RA = 0.12 + 0.630RM + eA RB = 0.04 + 1.448RM + eB M = 0.290 (eA) = 0.20 (eB) = 0.10
What is the covariance between each stock and the market index? (Round your answers to 4 decimal places.)
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An Introduction to Investment Banks, Hedge Funds, and Private Equity
Authors: David P. Stowell
1st edition
978-0123745033, 0123745039, 978-9380931074
