Given that,

RA = 4.5% + 1.40RM + eA
RB = –2.2% + 1.7RM + eB
σM = 24%; R-squareA = 0.30; R-squareB = 0.20; wA = 0.60; wB = 0.40
Comparing above two equations with standard equation of Sharpe Index Model,

Beta of Stock-A, A = 1.05

Beta of Stock-B, B = 1.2
Also, R-squareA = A x A x σM x σM /(σA x σA)
0.29 = 1.05 x 1.05 x 0.29 x 0.29 / (σA x σA)
(σA x σA) = 0.0927 / 0.29
(σA x σA) = 0.3197
σA = 0.5654
Also, R-squareB = B x B x σM x σM /(σB x σB)
0.14 = 1.2 x 1.2 x 0.29 x 0.29 / (σB x σB)
(σB x σB) = 0.1211 / 0.14
(σB x σB) = 0.8650
σB = 0.9301
Covariance (A,B) = A x B x σM x σM
= 1.05 x 1.2 x 0.29 x 0.29

= 0.106

Correlation (A,B) = Covariance (A,B) / σA / σB

= 0.106/ 0.5654/ 0.9301
= 0.2015

a.) σ2p = w2Aσ2A + w2Bσ2B + 2wAwBxCovariance(A,B)

= 0.6*0.6*0.5654*0.6134 + 0.4*0.4*0.9123*0.9301+ 2*0.6*0.4*0.106

= 0.1249+ 0.1358+ 0.05088

= 0.31158
σp = sqrt (0.31158 ) = 0.5582
Standard Deviation of Portfolio = 55.82%

b.) Portfolio Beta, p = wA A + wB B

= 0.6 x 1.05 + 0.4 x 1.2

= 1.11

c.) Variance of Stock-A, σA x σA = 0.3197 (calculated above)

Variance of Stock-B, σB x σB = 0.8650 (calculated above)

Variance of Portfolio, σP x σP = 0.31158 (calculated above)

d.) Covariance (P,M) = P x M x σM x σM
= 1.11 x 1.0 x 0.29 x 0.29

= 0.0934