vi$.$ Consider the multifactor APT with two factors. The risk premiums on

factor $1$ and factor $2$ portfolios are $5\%$ and $6\%,$ respectively. Stock A has

a beta of $1\mathrm{.}2$ on factor $1,$ and a beta of $0\mathrm{.}7$ on factor $2.$ The expected

return on stock $A$ is $17\%.$ If no arbitrage opportunities exist, the risk$-$free

rate of return is $.....$

$[7$ marks$]$