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The index model has been estimated for stocks A and B with the following results: R A = .01 + 0.8R M + e A
The index model has been estimated for stocks A and B with the following results:
RA = .01 + 0.8RM + eA;
RB= .02 + BRM + eB;
M = .3; A = .2; B = .1;
Correlation (RA, RB) = .03
What would be the beta of stock B?
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