Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What is the covariance? Please show all work on excel Suppose that the index model for stocks A and B is estimated from excess returns
What is the covariance? Please show all work on excel
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.0% + 0.40 RM + EA RB = 1.8% + 0.90RM + eB OM = 15%; R-square A = 0.30; R-squarep = 0.22 What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) & Answer is complete but not entirely correct. Covariance 0.5477 X Correlation coefficient 0.2570 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.0% + 0.40 RM + EA RB = 1.8% + 0.90RM + eB OM = 15%; R-square A = 0.30; R-squarep = 0.22 What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) & Answer is complete but not entirely correct. Covariance 0.5477 X Correlation coefficient 0.2570Step 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