Question: Suppose the APT has two factors. The expected returns on the first and second factors are 1 2 % and 1 0 % , respectively.

Suppose the APT has two factors. The expected returns on the first and second factors are 12% and 10%, respectively. Stock ACM has a beta of 1.4 on factor 1 and a beta of 0.6 on factor 2. The expected return on ACM is 16.3%. Based on the APT, what is the risk-free rate?
A.8.2%
B.6.5%
C.5.4%
D.7.2%
 Suppose the APT has two factors. The expected returns on the

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