Consider the Multifactor APT $\text { Portfolio }$ Assuming No Arbitrage Opportunities Exist, the Risk Premium on the F₁

question 30

Multiple Choice

Consider the multifactor APT. There are two independent economic factors, F₁ and F₂. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios: $\text { Portfolio }$ Assuming no arbitrage opportunities exist, the risk premium on the factor F₂ portfolio should be

• A) 3%.
• B) 4%.
• C) 5%.
• D) 6%.

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Definitions:

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Breast Tumors

Abnormal growths in breast tissue, which can be benign (non-cancerous) or malignant (cancerous).

Weight

A measurement of the heaviness or mass of a person or object, influenced by the force of gravity.

Dense Breasts

A condition where breasts have less fatty tissue and more glandular and fibrous tissue, observed in mammograms.