Suppose there are two independent economic factors, Me and My. The risk-free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 55%. Portfolios A and B are both well diversified. Deta on 1 Beta on M2 Expected Return (1) 2.1 -0.8 Portfolio 1.2 2.0 34 15 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected retum-beta relationship ErP) = 7.00 % + BP1+ BP2 Suppose there are two independent economic factors, Me and My. The risk-free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 55%. Portfolios A and B are both well diversified. Deta on 1 Beta on M2 Expected Return (1) 2.1 -0.8 Portfolio 1.2 2.0 34 15 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected retum-beta relationship ErP) = 7.00 % + BP1+ BP2