Suppose that the index model for stocks a and b is
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 1.6% + 0.70RM + eA RB = –1.8% + 0.9RM + eB σM = 22%; R-squareA = 0.20; R-square B = 0.15
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suppose that the index model for stocks a and b is estimated from excess returns with the following results ra 16
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