Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 2.0%+ 0.40RM + EA RB = -1.8%+0.9RM + eB OM 15% ; R-squareд = 0.30; R-squareg = 0.22 What is the standard deviation of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock A Stock B Standard Deviation % %
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 2.0%+ 0.40RM + EA RB = -1.8%+0.9RM + eB OM 15% ; R-squareд = 0.30; R-squareg = 0.22 What is the standard deviation of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock A Stock B Standard Deviation % %
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter4: Polynomial And Rational Functions
Section4.6: Rational Functions
Problem 11SC: Find the mean hourly cost when the cell phone described above is used for 240 minutes.
Related questions
Question

Transcribed Image Text:Suppose that the index model for stocks A and B is estimated from excess returns with the following results:
RA= 2.0% + 0.40RM + eA
RB = -1.8%+ 0.9RM + eB
OM = 15%; R-squareA = 0.30; R-squareB = 0.22
What is the standard deviation of each stock?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Stock A
Stock B
Standard Deviation
%
%
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 10 images

Recommended textbooks for you

College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning

Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill

Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt

College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning

Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill

Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt
