you observe the following situation: Security Peat Company Re-Peat Company Beta 1.70 0.85 Expected return on market Risk-free rate Expected Return 13.60 10.80 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. %
you observe the following situation: Security Peat Company Re-Peat Company Beta 1.70 0.85 Expected return on market Risk-free rate Expected Return 13.60 10.80 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. %
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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