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Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.50 .160 Repete Co. 1.19 .133 Assume these securities are correctly priced. Based

Suppose you observe the following situation:

Security	Beta	Expected Return
Pete Corp.	1.50	.160
Repete Co.	1.19	.133

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

What is the risk-free rate?

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