Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.90 .200 Repete Co. 1.59 .173

Suppose you observe the following situation:
  SecurityBetaExpected Return
  Pete Corp. 1.90  .200 
  Repete Co.1.59.173

What is the risk-free rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

  Risk-free rate%  

Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? 

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