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Consider the Multifactor APT

question 55

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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: Consider the multifactor APT.There are two independent economic factors, F<sub>1</sub> and F<sub>2</sub>.The risk-free rate of return is 6%.The following information is available about two well-diversified portfolios:   Assuming no arbitrage opportunities exist, the risk premium on the factor F<sub>2</sub> portfolio should be A) 3%. B) 4%. C) 5%. D) 6%. Assuming no arbitrage opportunities exist, the risk premium on the factor F2 portfolio should be


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