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Consider a two factor APT model, stock A has an expected return of 11.6%, a beta of 1.2 on factor 1, and a beta of

Consider a two factor APT model, stock A has an expected return of 11.6%, a beta of 1.2 on factor 1, and a beta of 0.9 on factor 2. The risk premium on the factor 1 portfolio is 3.2%. The risk-free rate of return is 2%. What is the risk-premium on factor 2 if no arbitrage opportunities exist? Please report your answer in number (use 0.032 instead of 3.2%).

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