Problem 10-4 Suppose that there are two independent economic factors, F and F2. The risk-free rate is 6%, and all stocks have independent firm- specific components with a standard deviation of 55%. Portfolios A and B are both well-diversified with the following properties: Portfolio A B Beta on F1 1.7 2.7 Beta on F2 2.2 -0.22 Expected Return 33% 30% What is the expected return-beta relationship in this economy? Calculate the risk-free rate, rf, and the factor risk premiums, RP, and RP2, to complete the equation below. (Do not round intermediate calculations. Round your answers to two decimal places.) Elrp) = rf+(BP1 * RP1) + (BP2 RP2) rf RP1 RP2 % % %