Stock Y has a beta of 1.22 and an expected return of 13.25 percent. Stock Z has a beta of .70 and an expected return of 10.00 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Risk-free rate

%

rev: 03_07_2016_QC_CS-44145