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

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

RA = 3.5% + 0.65RM + eA

RB = –1.6% + 0.80RM + eB

σM = 21%; R-squareA = 0.22; R-squareB = 0.14

What are the covariance and correlation coefficient between the two stocks? (Do not round intermediate calculations. Calculate using numbers in decimal form, not percentages. Round your answers to 4 decimal places.)

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