Suppose the two factor portfolios, here called portfolio 1 and 2, have Expected Returns E (r) = 10% and E(r2)-12%. Suppose further that the riak free rate 4%. The risk pre mium on the first factor portfolio is therefore 6%, while that on the second factor portfolio is 8%. Now consider an arbitrary well-diversified Portfolio (P), with Beta on the first factor, BP1 2 and the second factor BP 14 Find the fair rate of return on the security