Question
The index model has been estimated for stocks A and B with the following results. What is the standard deviation of stock A? RA =
The index model has been estimated for stocks A and B with the following results. What is the standard deviation of stock A?
RA = 0.02 + 1.0*
RM+
eA
RB = 0.0 + 1*
RM+
eB
M= 0.20; 
eA= 0.27; 
eB= 0.21.
Round your answer to 4 decimal places.
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Understanding financial statements
Authors: Lyn M. Fraser, Aileen Ormiston
9th Edition
136086241, 978-0136086246
