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Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.10 0.120 Repete Co. 0.79 0.093 Assume these securities are correctly priced. Based
Suppose you observe the following situation:
Security | Beta | Expected Return | ||||
Pete Corp. | 1.10 | 0.120 | ||||
Repete Co. | 0.79 | 0.093 | ||||
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
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