You estimate the market model for stocks i and j, using monthly returns. Pit - P.t = 0.2% +0.7 * (Im.t - rfc) + ei,t rj.t - 18,0 = -0.8% +1.8 * (Im.t - r.) + ejt Also om=10% (the standard deviation of the market excess return). For stock i, we know that ei=10% For stockj, we know that R2 in the market model regression is 0.59. a. (2 points) If we draw Security Characteristic Lines (SCL) of stock i and stock j, what are the intercept and slope of each SCL? b. (3 points) What is the systematic risk of stock i and stock j respectively? c. (3 points) What is the firm specific risk (namely unsystematic risk) of stock i and stock j respectively? d. (2 points) What is the total risk of stock i and stock j respectively? e. (2 points) What fraction of stock i's total variance can be diversified? What fraction of stock j's total variance can be diversified? f. (3 points) What is the covariance and correlation between stocks i and j