IN-CI.ASS EXERCISE 2 (Multifactor APT) The risk-free rate in the two-factor economy is 3%. All the above portfolios are priced based on APT. (a.) What are the expected returns of the 2 factor portfolios by utilizing X,Y, and the riskfree asset? Ry=3%+6%x2+8%1.5=27% Ry=3%+6%(3)+8%(1)=23% (b.) Construct the unit factor portfolio for factor 1 with portfolio X, Y, and the risk-free asset