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Suppose stock returns can be explained by a two-factor model. The firm-specific risks for all stocks are independent. The following table shows the information for

Suppose stock returns can be explained by a two-factor model. The firm-specific risks for all stocks are independent. The following table shows the information for two diversified portfolios:

1

2

3

Portfolio A

.89

1.19

18%

Portfolio B

1.49

-.29

16

If the risk-free rate is 6 percent, what are the risk premiums for each factor in this model? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Factor F1

___________

%

Factor F2

___________

%

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