Suppose you observe the following situation: Security Beta Expected Return Pete 1.25 1323 Corp. Repete .87...
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Suppose you observe the following situation: Security Beta Expected Return Pete 1.25 1323 Corp. Repete .87 .0967 Co. a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return on market using Pete Corp. Expected return on market using Repete Co. b. Risk-free rate % 0 % Suppose you observe the following situation: Security Beta Expected Return Pete 1.25 1323 Corp. Repete .87 .0967 Co. a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return on market using Pete Corp. Expected return on market using Repete Co. b. Risk-free rate % 0 %
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