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Suppose you observe the following situation:

Security Beta Expected Return

Peat Co. 1.20 11.2

Re-Peat Co. 1.00 9.6

Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91595885

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