finance-A stock has an expected return of 13.0 percent,

QUESTION

A stock has an expected return of 13.0 percent, a beta of 1.20, and the expected return on the market is 11.63 percent. What must the risk-free rate be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the “%” sign in your response.) Risk-free rate% Suppose you observe the following situation: SecurityBeta Expected Return Peat Co.1.20 14.6 Re-Peat Co..60 10.3 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.) Expected return % Risk-free rate %

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