Multiple Choice
Consider the multifactor APT.The risk premiums on the factor 1 and factor 2 portfolios are 6% and 4%,respectively.The risk-free rate of return is 4%.Stock A has an expected return of 16% and a beta on factor 1 of 1.3.Stock A has a beta on factor 2 of ________.
A) 1.33
B) 1.05
C) 1.67
D) 2.00
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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