Question: 6. Consider the multi-factor APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor

6. Consider the multi-factor APT with two factors. Portfolio A has

6. Consider the multi-factor APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor 2 . The risk premiums on the factors 1 and 2 portfolios are 1% and 7% respectively. The risk-free rate of return is 7%. The expected return on portfolio A is if no arbitrage opportunities exist. A. 13.5% B. 15.0% C. 16.5% D. 23.0%

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