Question: roblem 1 3 - 2 7 SML ( LO 4 ) Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1 .

roblem 13-27 SML (LO4) Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.800.190 Repete Co.1.490.163 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Expected Return on Market Pete Corp. % Repete Co.% What is the risk-free rate? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Risk-free rate %

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