Suppose that the index model for stocks A and B is estimated from excess returnswith the following results:RA = 3% +0.7RM + еARB= -2% + 1.2RM + eBOM = 20% ; R-squareд = 0.20; R-squareg = 0.12What is the covariance between each stock and the market index? (Calculateusing numbers in decimal form, not percentages. Do not round yourintermediate calculations. Round your answers to 3 decimal places.)Stock AStock BCovariance

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Answered: Suppose that the index model for stocks…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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