Question: SML Suppose you observe the following situation: Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market?

SML Suppose you observe the following situation:

Beta Expected Return .150 Security Pete Corp. 150 1.4 .115 Repete Co.


Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate?

Beta Expected Return .150 Security Pete Corp. 150 1.4 .115 Repete Co.

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