Suppose there are two independent economic factors, $M_1$ and $M_2.$ The risk$-$free rate is $6\%,$ and all stocks have independent firmspecific components with a standard deviation of $58\%.$ Portfolios A and $B$ are both well diversified.

$\backslash$table$[[$Portfolio Beta on $M_1,$Beta on $M_2,$Expected Return $(\%),],[$A$,1\mathrm{.}7,2\mathrm{.}4,37],[B,2\mathrm{.}3,-0\mathrm{.}8,10]]$

Required:

What is the expected return$-$beta relationship in this economy?

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

Expected return$-$beta relationship $E(r_P)=q,$

$\%+$

${}_{P1}+$

${}_{P2}$