4 Assume that there are two factors that price assets Risk free rate is 3 Factor 1 has an expected return of 7 and factor 2 has an expected return of 9 Calculate the expected return for each asset with the following sensitivities using the Arbitrage Pricing Theory (APT) (a) B 1, B 0 8 (5 marks) (b...

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4. Assume that there are two factors that price assets. Risk free rate is 3%. Factor...

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4. Assume that there are two factors that price assets. Risk free rate is ( 3 % ). Factor 1 has an expected return of ( 7

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