Problem 7-33 (Algo) Suppose there are two independent economic factors, M, and M2. The risk-free rate is 6%, and all stocks have independent firm-specific components with a standard deviation of 42%. Portfolios A and B are both well diversified. Portfolio A B Beta on M 1.5 2.3 Beta on M2 2.4 Expected Return (%) 32 10 -0.5 Required: What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return-beta relationship E(rp) = % + Bp1