Question: Consider a two-factor asset pricing model . Portfolio A has a beta of 1 on factor one and a beta of 2 on factor two

Consider a two-factor asset pricing model. Portfolio A has a beta of 1 on factor one and a beta of 2 on factor two. The risk premiums on the factor one and two portfolios are 4% and 5%, respectively. The risk-free rate of return is 2%. The expected return on portfolio A is __________ according to this model.

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