Question: QUESTION 8 Suppose the APT has two factors. The expected returns on the first and second factors are 12% and 10%, respectively. Stock ISOM has

QUESTION 8 Suppose the APT has two factors. The expected returns

QUESTION 8 Suppose the APT has two factors. The expected returns on the first and second factors are 12% and 10%, respectively. Stock ISOM has a beta of 1.2 on factor 1 and a beta of 0.8 on factor 2. The risk-free rate is 2%. What is the expected return on ISOM? A. 18.4% B. 22.4% C. 20.4% O D. 24.4%

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