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The index model has been estimated for stocks A and B with the following results: RA= 0.12 +0.625RM + EA RB = 0.04 + 1.440 RM + eB OM= 0.285 o(еA) = 0.20 o(eg) = 0.10 What is the correlation coefficient between the two stocks?

The index model has been estimated for stocks A and B with the following results: RA= 0.12 +0.625RM + EA RB = 0.04 + 1.440 RM + eB OM= 0.285 o(еA) = 0.20 o(eg) = 0.10 What is the correlation coefficient between the two stocks?

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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The index model has been estimated for stocks A and B with the following results: RA = 0.12 +0.625RM + EA RB 0.04 + 1.440 RM + eB = OM = 0.285 o(eA) = 0.20 o(eg) = 0.10 What is the correlation coefficient between the two stocks?
Transcribed Image Text:The index model has been estimated for stocks A and B with the following results: RA = 0.12 +0.625RM + EA RB 0.04 + 1.440 RM + eB = OM = 0.285 o(eA) = 0.20 o(eg) = 0.10 What is the correlation coefficient between the two stocks?
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