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  3. 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...

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Accounting

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Suppose that the index model for stocks A and B is estimated from excess returns with the following results. Hg = 3.802 + 1.25Ry + x Rg = -1.802 + 1.600 x = 185 R-squarex - 0.24; R-square - 0.18 Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B. a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Standard deviation b. What is the beta of your portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Portfolio beta

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