Question: 2) Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.92 on factor 1 and a beta of 1.37 on

2) Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.92 on factor 1 and a beta of 1.37 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 2.3% and 3.4%, respectively. The risk-free rate of return is 4%. What is the expected return on portfolio A if no arbitrage opportunities exist?

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