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Problem 1 3 - 2 7 SML [ LO 4 ] Suppose you observe the following situation: table [ [ Security , Beta,Expected Return
Problem SML LO
Suppose you observe the following situation:
tableSecurityBeta,Expected ReturnPete Corporation,Repete Company,
a Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
b What is the riskfree rate? Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
tablea Expected return on market,
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