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Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.95 0.205 Repete Co. 1.64 0.178 What is the risk-free rate? (Do not

Suppose you observe the following situation:

Security Beta Expected Return
Pete Corp. 1.95 0.205
Repete Co. 1.64 0.178

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

Risk-free rate %

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. %

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