Suppose that asset returns are generated by a $2-$factor risk model. As a fund manager, you are offering two

funds, A and $B,$ with the following returns:

$r_A\frac{?}{b}=ar(r{)}_A+b_{A1}{f}_1+b_{A2}{f}_2$

$r_B\frac{?}{b}=ar(r{)}_B+b_{B1}{f}_1+b_{B2}{f}_2$

where $f_1$ and $f_2$ are the two independent risk factors with zero mean. Fund characteristics are given by the

following:

Factor $f_1$ is the abnormal return on the market portfolio $($market return minus its mean$).$ The risk$-$free rate is

$2\mathrm{.}82\%.$

Use the above information to find the factor premia for the two factors.

A$.$ Factor $1$ risk premium:...$\%$

B$.$ Factor $2$ risk premium:....$\%$