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Mathematics, 20.12.2019 21:31 dokithefursona

Consider the multifactor apt with two factors. stock a has an expected return of 17.6%, a beta of 1.45 on factor 1 and a beta of .86 on factor 2. the risk premium on the factor 1 portfolio is 3.2%. the risk-free rate of return is 5%. what is the risk-premium on factor 2 if no arbitrage opportunities exit? a) 9.26% b) 3% c) 4% d) 7.75% e)none of the above

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Consider the multifactor apt with two factors. stock a has an expected return of 17.6%, a beta of 1....
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