Question: The expected return on HiLo stock is 12.5 percent, while the expected return on the market is 10.5 percent. The beta of HiLo is 1.3.

The expected return on HiLo stock is 12.5 percent, while the expected return on the market is 10.5 percent. The beta of HiLo is 1.3. What is the risk-free rate of return? (Please answer in decimal format. No credit will be awarded if your answer is in percentage.)

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