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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% + 0.60RM + eA RB = –1.5% + 0.70RM + eB M = 19%; R-squareA = 0.24; R-squareB = 0.18 What are the covariances and correlation coefficient between the two stocks? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answers to 4 decimal places.) Covariance Correlation coefficient.

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Financial Management, Finance

Category:- Financial Management
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