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Consider the multifactor APT with two factors. Stock A has an expected return of 16.4%, a beta of 1.4 on factor 1, and a beta of .8 on factor 2. The risk premium on the factor-1 portfolio is 3%. The risk-free rate of return is 6%. What is the risk-premium on factor 2 if no arbitrage opportunities exist?
Arousal
A physiological and psychological state of being awake or reactive to stimuli, involving changes in heart rate, brain activity, and energy levels.
Performance
The action or process of carrying out or accomplishing an action, task, or function.
Basal Metabolic Rate
The number of calories required to keep your body functioning at rest, often referred to as BMR.
Settling Point
A theory suggesting that body weight is regulated at a predetermined or preferred level by a feedback control mechanism, which balances energy intake with energy expenditure.
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