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The index model has been estimated for stocks A and B with the following results: RA = 0.12 + 0.690RM + eA RB = 0.04
The index model has been estimated for stocks A and B with the following results:
RA = 0.12 + 0.690RM + eA
RB = 0.04 + 1.544RM + eB
M = 0.350
(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
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