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What is the covariance of returns between two stocks

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Reference no: EM132656453

The index model has been estimated for stocks A and B with the following results:0.04 + 0.8RM+ eA0.01 + 1.1RM+ eB 0.30 G(eA) 0.25 0(eB) = 0.10

A. What is the covariance of returns between these two stocks? The correlation?

B. What is the standard deviation and variance of returns on each stock?

C. Break down the variance of returns for each stock into systematic and firm- specific components

Reference no: EM132656453

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