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Consider the multi factor APT with two factors. Stock A has an expected return of 15%, a beta of 1.5 on factor 1, and a

Consider the multi factor APT with two factors. Stock A has an expected return of 15%, a beta of 1.5 on factor 1, and a beta of .9 on factor 2. The risk premium on the factor 1 portfolio is 6%. The risk free rate of return is 5%. What is the risk-premium on factor 2 if no arbitrage opportunities exist?

a. 2.21%

b. 6.66%

c. 3.53%

d. 1.11%

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