Consider the multifactor APT. There are two independent economic factors, F₁ and F₂. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios:

Portfolio	on F1			on F2			Expected Return
A		1.0			2.0			19	%
B		2.0			0.0			12	%

Assuming no arbitrage opportunities exist, the risk premium on the factor F₂ portfolio should be

Select one:

a. 3%.

b. 4%.

c. 5%.

d. 6%.