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5) There are two independent economic factors, M1 and M2. The riskfr independent firm-specific components with a standard deviation of 25%, portfo! diversified. Given the

5) There are two independent economic factors, M1 and M2. The riskfr independent firm-specific components with a standard deviation of 25%, portfo! diversified. Given the data below, write a proper pricing model? ios A and B are well Portfolio Beta on M1 Beta on M2 Erol 11.75 | 35% 20% 1.5 1.0 0.65

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