Suppose there are two independent economic factors, M, and M2. The risk-free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 43%. Portfolios A and B are both well diversified. Portfolio Expected Return (%) Beta on M 1.5 2.4 Beta on M2 2.5 -0.5 33 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Expected return-beta relationship E(P) = 7.000 3.40 RM1 8 .35 BP2