Question: Under a two factor model with APT, suppose that expected returns are described by E{r} = 3% + 11 + b2x5% Given two asset returns

Under a two factor model with APT, suppose that expected returns are described by E{r} = 3% + 11 + b2x5% Given two asset returns are described by n1 = 0% + 16 + 32 + el 2 = 1% + 16 +212 + 2 what is the expected return of 12? (Nearest 0.01 in percentage terms, e.g. write 4.25 for 4.25%)

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