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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% +0.7RM + eA RB = -2% + 1.2RM + eB OM = 20%; R-squareд = 0.20; R-square = 0.12 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.) Covariance Correlation coefficient

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% +0.7RM + eA RB = -2% + 1.2RM + eB OM = 20%; R-squareд = 0.20; R-square = 0.12 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.) Covariance Correlation coefficient

MATLAB: An Introduction with Applications
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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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% + 0.7RM + eA RB = -2% + 1.2RM + eB OM = 20% ; R-squareд = 0.20; R-squareg = 0.12 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.) Covariance Correlation coefficient
Transcribed Image Text:Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 3% + 0.7RM + eA RB = -2% + 1.2RM + eB OM = 20% ; R-squareд = 0.20; R-squareg = 0.12 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.) Covariance Correlation coefficient
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