Consider the multifactor APT.There are two independent economic factors, F₁andF₂.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 factorF₁portfolio should be A)3%. B)4%. C)5%. D)6%.

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The Answer of Consider the multifactor APT.There are two independent economic factors, F₁andF₂.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 factorF₁portfolio should be A)3%. B)4%. C)5%. D)6%.

Consider the Multifactor APT