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I am trying to use what I learned about multi-Factor Models to apply to some questions:

Suppose investing 80% in Portfolio A -100% in Portfolio B 20% in risk free asset

If $\hat{F_1}$, denoted by market unexpected change, = 1and $\hat{F_2}$ = .7

I am wondering how to find whether there is arbitrage?

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Could you explain better your model, please? –  Quantopic Apr 30 '14 at 23:54

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