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Suppose you observe the following situation: Beta Security Peat Co. Re-Peat Co. 1.30 .80 Expected Return 13.0 9.9 Assume these securities are correctly priced. Based

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Suppose you observe the following situation: Beta Security Peat Co. Re-Peat Co. 1.30 .80 Expected Return 13.0 9.9 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Expected return on market Risk-free rate 11.43 X % 6.20 X %

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