Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp 1.9 0.200 Repete Co 1.59 .173 Assume these securities are correctly priced. Based
Suppose you observe the following situation:
| Security | Beta | Expected Return | |
| 1.9 | 0.200 | |
| Repete Co | 1.59 | .173 |
Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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.)
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