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Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.30 .140 Repete Co. .99 .113 Assume these securities are correctly priced. Based

Suppose you observe the following situation:
Security Beta Expected Return
Pete Corp. 1.30 .140
Repete Co. .99 .113

Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market?

2.68% is not the right answer

What is the risk-free rate?

11.39% is not the answer

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