Problem $12-5$ Multifactor Models

Suppose stock returns can be explained by a two$-$factor model. The firm$-$specific risks for

all stocks are independent. The following table shows the information for two diversified

portfolios:

If the risk$-$free rate is $5$ percent, what are the risk premiums for each factor in this model?

$($Do not round intermediate calculations and enter your answers as a percent rounded

to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Factor $F_1$

Factor $F_2$

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