Question: 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

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: 1 B2 E(R) Portfolio .79 1.09 18% A -.19 16 Portfolio B 1.39 If the risk-free rate is 4 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., 32.16.) Factor F1 Factor F2 % %

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