Question: Suppose you observe the following situation: Security Beta Expected Return Peat Co. 1.50 14.5 Re-Peat Co. .75 10.6 Assume these securities are correctly priced. Based
| Suppose you observe the following situation: |
| Security | Beta | Expected Return |
| Peat Co. | 1.50 | 14.5 |
| Re-Peat Co. | .75 | 10.6 |
| Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
| Expected return | % |
| Risk-free rate | % |
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