AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 50 Topic 6 Discussion

AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 50 Topic 6 Discussion

CWM_LEVEL_2 Exam Topic 6 Question 50 Discussion:
Question #: 50
Topic #: 6

Section C (4 Mark)

Consider the multifactor APT. There are two independent economic factors, F1 and F2. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios:

CWM_LEVEL_2 Question 50

Assuming no arbitrage opportunities exist, the risk premium on the factor F1 portfolio should be __________.


A.

3%


B.

4%


C.

5%


D.

6%


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