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

###### Question:

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.5% + 0.60RM + EA RB = -1.5% + 0.7 RM + EB OM = 19%; R-square A = 0.24; R-squares = 0.18 Break down the variance of each stock to the systematic and firm-specific components. (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.) Risk for A Risk for B Systematic Firm-specific

#### Similar Solved Questions

##### Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with...
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%.The current stock price is P0 $22 00.The last dividend was D0$2 25, and it is expected to grow at a 5% constant ...
##### How long does it take a total charge of 10.6 C to pass through a cross-sectional...
How long does it take a total charge of 10.6 C to pass through a cross-sectional area of copper wire that carries a current of 5.2 A? s...
##### 1)Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak...
1)Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below: April May June Total Budgeted sales (all on account) $300,000$500,000 $200,000$1,000,000 ...
##### Dear staff: This is Yu.Zhou. May anybody who is good at the Research Method & Statistics...
Dear staff: This is Yu.Zhou. May anybody who is good at the Research Method & Statistics in Aging course help me with the multiple choice question below. Thank you, sincerely. I would like to know the correct choice of this multiple choice question and please add explanation on why that answer i...
##### Use python 2.7 to write this code: This code takes in a bunch of protein sequences...
Use python 2.7 to write this code: This code takes in a bunch of protein sequences as input listed below and tracks the highest average TM value (number under each protein) and If a protein has the highest TM value of all proteins found so far, track it. At the very end, the program should print out...
##### Explain the role of “securitization” as a cause of the financial crisis of 2008. Be sure...
Explain the role of “securitization” as a cause of the financial crisis of 2008. Be sure to explain what mortgage securitization is and why it caused problems....
##### How do you write the equation for a circle with Origin: (5,5) ; Radius = 2?
How do you write the equation for a circle with Origin: (5,5) ; Radius = 2?...
##### Integrity & Professional Judgment and how it applies to the AICPA Code of Conduct
Integrity & Professional Judgment and how it applies to the AICPA Code of Conduct...
##### Solve by hand the ode for the greens function for the given homogeneous boundary or initial...
Solve by hand the ode for the greens function for the given homogeneous boundary or initial conditions (a) G. + 5 t2 G(t, to) = ?(t-to), G = 0 for t < t0 . Plot G(t, o)....
##### 50 mL of water at 51.9°C were mixed with 50 mL of water at 23.2°C in...
50 mL of water at 51.9°C were mixed with 50 mL of water at 23.2°C in a calorimeter also at 23.2°C. The final temperature was 33.1°C. Assuming that neither the density of water nor its specific heat capacity change with temperature, calculate the total heat capacity of the calorimeter...
##### Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends Inc., with the assistance...
Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for December: Estimated sales ...