Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.8% +

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answerhappygod
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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.8% +

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Suppose that the index model for stocks A and B is estimatedfrom excess returns with the following results: RA = 2.8% + 1.0RM +eA RB = -1.0% + 1.3RM + eB σM = 18%; R-squareA = 0.27; R-squareB =0.13 What is the covariance between each stock and the marketindex? (Calculate using numbers in decimal form, not percentages.Do not round your intermediate calculations. Round your answers to3 decimal places.)
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