consider the multifactor APT with two factors. Stock A has an expected return of 12.70%, a beta of 1.2 on factor 1, and

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answerhappygod
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consider the multifactor APT with two factors. Stock A has an expected return of 12.70%, a beta of 1.2 on factor 1, and

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consider the multifactor APT with two factors. Stock A has anexpected return of 12.70%, a beta of 1.2 on factor 1, and a beta of0.6 on factor 2. The risk premium on the factor 1 portfolio is4.00%. The risk-free rate of return is 5.20%.
What is the risk premium on factor 2 if no arbitrageopportunities exist?
(Round your answer to 2 decimalplaces.)
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