Question: Two-factor APT example: Consider the following two-factor model for the returns of three well-diversified assets (i.e., with no idiosyncratic risk): rA = 0.5+2I1 +2I2, rB

Two-factor APT example: Consider the following two-factor model for the returns of three well-diversified assets (i.e., with no idiosyncratic risk): rA = 0.5+2I1 +2I2, rB = 0.1?I1 +I2 rC = 0.4+I1 ?...

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