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Consider the multifactor APT with two factors. The risk premiums on the factor 1 and factor 2 portfolios are 6% and 7.25%, respectively. Stock A

Consider the multifactor APT with two factors. The risk premiums on the factor 1 and factor 2 portfolios are 6% and 7.25%, respectively. Stock A has a beta of 1.11 on factor-1, and a beta of 1.28 on factor-2. The expected return on stock A is 18%. If no arbitrage opportunities exist, what is the risk-free rate of return?

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