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Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.95 .205 Repete Co. 1.64 .178 Assume these securities are correctly priced. Based

Suppose you observe the following situation:

Security Beta Expected Return
Pete Corp. 1.95 .205
Repete Co. 1.64 .178

Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return on market %

What is the risk-free rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Risk-free rate %

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