Question: Consider a one - factor Arbitrage Pricing Theory model. There are two well - diversified portfolios: A and B . Portfolio A s expected return

Consider a one-factor Arbitrage Pricing Theory model. There are two well-diversified portfolios: A and B. Portfolio As expected return is 24 percent and its beta is 0.6; Portfolio Bs expected return is 12 percent and its beta is 0.2. What is the risk-free rate in the model?

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