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Consider the APT. The risk premiums on factor 1 and factor 2 portfolios are 5% and 3%, respectively. The risk-free rate of return is 1.5%.
Consider the APT. The risk premiums on factor 1 and factor 2 portfolios are 5% and 3%, respectively. The risk-free rate of return is 1.5%. Stock A has an expected return of 19% and a beta on factor 1 of 0.8. What should be the beta on factor 2 of Stock A? (In decimal (i.e., not in percentage), use two decimal places)
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