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Consider the multifactor APT. There are two independent economic factors, F1 and F2. The following information is available about two well-diversified portfolios with risk free
Consider the multifactor APT. There are two independent economic factors, F1 and F2. The following information is available about two well-diversified portfolios with risk free rate of 5%.
Portfolio | on F1 | on F2 | Expected Return |
A | 2.0 | 1.5 | 13% |
B | 1.0 | 1.0 | 10% |
What's the risk premium of factor portfolio 1?
Group of answer choices
2%
6%
1%
4%
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