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%+0.9RM + eB OM 15% ; R-squareд = 0.30; R-squareg = 0.22 What is the standard deviation of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock A Stock B Standard Deviation % %

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.5: Comparing Sets Of Data
Problem 13PPS
icon
Related questions
Question
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%+ 0.9RM + eB
OM = 15%; R-squareA = 0.30; R-squareB = 0.22
What is the standard deviation of each stock?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Stock A
Stock B
Standard Deviation
%
%
Transcribed Image Text: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%+ 0.9RM + eB OM = 15%; R-squareA = 0.30; R-squareB = 0.22 What is the standard deviation of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock A Stock B Standard Deviation % %
Expert Solution
steps

Step by step

Solved in 4 steps with 10 images

Blurred answer
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897…
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt