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(Solved): Suppose that the index model for stocks A and B is estimated from excess returns with the following ...



Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.5% + 0.95RM + eA RB = -1.8% + 1.10RM + eB σM = 27%; R-squareA = 0.23; R-squareB = 0.11 Break down the variance of each stock to the systematic and firm-specific components. Note: Do not round intermediate calculations. Calculate using numbers as percentages. For example, use "20" for the calculation if the standard deviation is provided as 20%. Round your answers to the nearest whole number.



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