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2) Consider the multifactor APT with two factors. Stock A has an expected return of 18%, a beta of 1.5 on factor 1, and a

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2) Consider the multifactor APT with two factors. Stock A has an expected return of 18%, a beta of 1.5 on factor 1, and a beta of 0.8 on factor 2. The risk premium on the factor 1 portfolio is 4%. The risk-free rate of return is 6%. What is the risk-premium on factor 2 if no arbitrage opportunities exist? (4 points) a. 10.26 b. -7.5 C. 7.5 d. You need market risk premium to

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