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Suppose you observe the following situation: Security Beta Expected Return Peat Co. 1.60 13.4 Re-Peat Co. .85 10.7 Assume these securities are correctly priced. Based

Suppose you observe the following situation:

Security Beta Expected Return
Peat Co. 1.60 13.4
Re-Peat Co. .85 10.7

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. Omit the "%" sign in your response.)

Expected return %
Risk-free rate %

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