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Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.6% + 0.9RM + eA RB = –2.0% + 1.2RM + eB ?M = 26%; R-squareA = 0.21; R-squareB = 0.12 Break down the variance of each stock to the systematic and firm-specific components. (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) Risk for A Risk for B Systematic Firm-specific

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