Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1 . 2 5 0 . 1 3 5 Repete Co . 0

Suppose you observe the following situation:
Security Beta Expected Return
Pete Corp. 1.250.135
Repete Co.0.940.108
What is the risk-free rate? (Do not round intermediate calculations. Round the final answer to 3 decimal places.)
Risk-free rate
%
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.
%

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