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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 = 2.0% + 0.40RM + eA
RB = 1.8% + 0.90RM + eB
M = 15.0%; R-squareA = 0.30; R-squareB = 0.22

What is the covariance between each stock and the market index?

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