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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The Answer of 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%.

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

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