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The index model has been estimated using historical excess return data for stocks A, B,...

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Finance

The index model has been estimated using historical excess return data for stocks A, B, and C, with the following results:

RA = 0.02 + 0.9RM + eA

RB = 0.04 + 1.2RM + eB

RC = 0.10 + 1.0RM + eC

M = 0.22

(eA) = 0.21

(eB ) = 0.11

(eC ) = 0.23

a. What are the standard deviations of stocks A, B, and C? (1.5 marks)

b. Break down the variances of stocks A, B, and C into their systematic and firm-specific components. (1.5 marks)

c. What is the covariance between the returns on each pair of stocks? (1.5 marks)

d. What is the covariance between each stock and the market index? (1.5 marks)

please solve the question as soon as possible

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