There are two independent economic factors M1 and M2.The risk-free rate is 5% and all stocks have independent firm-specific components with a standard deviation of 25%.Portfolios A and B are well diversified.Given the data below which equation provides the correct pricing model? A) E(r_P) = 5 + 1.12$\beta$_P1 + 11.86$\beta$_P2 B) E(r_P) = 5 + 4.96$\beta$_P1 + 13.26$\beta$_P2 C) E(r_P) = 5 + 3.23$\beta$_P1 + 8.46$\beta$_P2 D) E(r_P) = 5 + 8.71$\beta$_P1 + 9.68$\beta$_P2

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The Answer of There are two independent economic factors M1 and M2.The risk-free rate is 5% and all stocks have independent firm-specific components with a standard deviation of 25%.Portfolios A and B are well diversified.Given the data below which equation provides the correct pricing model? A) E(r_P) = 5 + 1.12$\beta$_P1 + 11.86$\beta$_P2 B) E(r_P) = 5 + 4.96$\beta$_P1 + 13.26$\beta$_P2 C) E(r_P) = 5 + 3.23$\beta$_P1 + 8.46$\beta$_P2 D) E(r_P) = 5 + 8.71$\beta$_P1 + 9.68$\beta$_P2

There Are Two Independent Economic Factors M1 and M2 β\betaβ P1 + 11

There Are Two Independent Economic Factors M1 and M2 $\beta$ _P1 + 11