LATAM is Latin Americas biggest airline, headquartered in Chile. The company has approached you for advice on hurdle rates in its three biggest regions: Chile, Brazil, and US.

	10-yr govt bond rate in US $	10-yr govt bond rate in local currency	St. Dev. in local equity index	St. Dev. on 10-yr govt bond
Chile	5.9%	7.5%	30%	21%
Brazil	4.65%	10.75%	24%	16%
US	3.5%	3.5%	18%	12%

b) Assuming the US (mature market) risk premium = 5.8%, Beta 1.0 estimate the risk-free rate and equity risk premium in Chilean peso for Chilean operations.