Answer:
1.597
Step-by-step explanation:
The computation of the factor beta using the one-factor arbitrage pricing model is shown below:
As we know that
= (Expected rate of return - risk-free rate of return) ÷ (market rate of return-risk-free rate of return)
= (17.61% - 3.68%) ÷ (12.4% - 3.68%)
= 1.597
We simply applied the above formula to determine the factor beta and the same is to be considered