Question
Suppose you observe the following situation: Security Beta Expected Return Pete Corp 1.40 .150 Repete Co. 1.09 .123 Assume these securities are correctly priced. Based
Suppose you observe the following situation:
| Security | Beta | Expected Return |
| Pete Corp | 1.40 | .150 |
| Repete Co. | 1.09 | .123 |
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? Risk free rate %
Please show all work and calculations!
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Finance Plain And Simple
Authors: Sebastian Nokes
1st Edition
0273731297, 978-0273731290
