Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.25 .1323 Repete Co. .87 .0967 a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market

The expected return on the market rate is 10.59%

Explanation:

Expected return=risk-free rate +Beta*(market rate- risk-free rate)

13.23 = Rf + 1.25*(Rm-Rf)

13.23 = 1.25Rm-  0.25Rf

Rm = (13.23 + 0.25Rf ) / 1.25 (equ i)

9.67 = Rf+0.87*(Rm-Rf)

9.67 = 0.13Rf+0.87Rm

Substitute (13.23+0.25Rf)/1.25 for Rm from equ (i)

9.67 = 0.13Rf+0.87*(13.23+0.25Rf)/1.25

9.67 = 0.13Rf+9.20808+0.174Rf

Rf = (9.67-9.20808)/(0.13+0.174)

Rf = 0.46192 / 0.304

Rf = 1.519474

Rf = 1.52%

Hence,  Risk free rate is 1.52%

From the equ (i)

Rm = (13.23+0.25Rf)/1.25

Rm = (13.23+0.25(1.52%)/1.25

Rm = (13.23+0.003 ) /1.25

Rm = (13.23+0.003 ) /1.25

Rm = 13.233 / 1.25

Rm = 10.5864

Rm = 10.59%

Hence, expected return on Market rate is 10.59%

answer: a. the kind of population living in your neighbourhood.

the census explorer data tool by the us census bureau allows the user to zoom in on any neighbourhood within the united states and find the kind of people residing in that by race and age.  

the tool needs to needs to be used twice – once in order to find what type of people reside in a neighbourhood, and then to see the age groups of the people in the same neighbourhood.