(Big HINT: Follow slides 21-25 in this week's lecture). Assume that you are using a two-factor APT model, with factors Pand Q. to find the fair (model-) expected return on a well-diversified portfolio Z that has an actual expected return of 20%. Portfolio Z's factor loadings (ie., Z's betas on each of the two factors) and the factors' risk premiums are shown in the table below.Portfolios for factors P and Q are tradable (i.e, you can take long or short positions in them). Assume that the factor loading of Pon Q is o (and the factor loading of Q on Pis also, by extension, too). The risk-free rate is 4%. Factor Z's factor loading (Beta) Factor Risk Premium P 1.5 12.0% 0.6 -3% There is an arbitrage opportunity. Question 7 1 pts What is the alpha of Portfolio Z? Please answer in decimal form, not percent For questions 8-12 Create a strategy that takes advantage of the mispricing that exists. Create your strategy your strategy so that it goes either long or short $1 invested in Portfolio z. Question 8 1 pts Following on from the above: with a strategy that goes either long or short $1 in Portfolio Z, what should the amount invested in Portfolio Z be? (use + for long and - for short) Question 9 1 pts Following on from the above: with a strategy that goes either long or short $1 in Portfolio Z, what should the amount invested in the risk-free asset be? (use + for long and for short)