Suppose you observe the following situation: ...
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Accounting
| Suppose you observe the following situation:
|
| Security | Beta | Expected Return | ||||
| Pete Corp. | 1.85 | .195 | ||||
| Repete Co. | 1.54 | .168 | ||||
| Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? and What is the risk-free rate? |
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