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Suppose you observe the following situation: Beta Security Pete Corp. Repete Co. 1.15 0.84 Expected Return 0.125 0.098 What is the risk-free rate? (Do not

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Suppose you observe the following situation: Beta Security Pete Corp. Repete Co. 1.15 0.84 Expected Return 0.125 0.098 What is the risk-free rate? (Do not round intermediate calculations, Round the final answer to 3 decimal places.) Risk-free rate % Assume these securities are correctly priced. Based on the CAPM what is the expected return on the market? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Expected Return on Market Pete Corp. Repete Co. 5

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