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Consider the multifactor APT with two factors. Stock A has an expected return of 16%, a beta of 1.25 on factor 1, and a beta

Consider the multifactor APT with two factors. Stock A has an expected return of 16%, a beta of 1.25 on factor 1, and a beta of 1.40 on factor 2. The risk premium on the factor 1 portfolio is 4.2%. The risk- free rate of return is 4%. What is the risk-premium on factor 2 if no arbitrage opportunities exist?

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