Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.45 0.155 Repete Co. 1.14 0.128 What is the risk-free rate? (Do not

Suppose you observe the following situation:

Security	Beta		Expected Return
Pete Corp.		1.45		0.155
Repete Co.		1.14		0.128

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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