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Suppose that the index model for stocks A and B is estimated from excess returns...

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Accounting

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

RA = 2.8% + 1.00RM + eA

RB = 1.0% + 1.30RM + eB

M = 18%; R-squareA = 0.27; R-squareB = 0.13

What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.)

covariance =

correlation coefficient =

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