Question: Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1 . 5 5 0 . 1 6 5 Repete Co . 1

Suppose you observe the following situation:
Security Beta Expected Return
Pete Corp. 1.550.165
Repete Co.1.240.138
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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