Suppose you observe the following situation:
Security Beta Expected return
Pete Corp. 1.10 .120
Repete Co. .79 .093
Assume these securities are correctly priced.
What is the risk-free rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Risk-free rate % =
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 =