Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.15 0.125 Repete Co. 0.84 0.098 Assume these securities are correctly priced. Based

Suppose you observe the following situation:

Security	Beta		Expected Return
Pete Corp.		1.15		0.125
Repete Co.		0.84		0.098

Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Expected return on market

What is the risk-free rate? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Risk-free rate

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