Suppose you observe the following situation:

Security Beta Expected Return

Pete Corp. 1.15 0.125

Repete Co. 0.84 0.098

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.

%

What is the risk-free rate? (Do not round intermediate calculations. Round the final answer to 3 decimal places.)

Risk-free rate

%