Sol:

Expected return = 13.6%

Beta = 1.4

Market return = 11.2%

To compute risk free rate

Expected return = Risk free return + beta * (Market return - Risk free return)

13.6% = Risk free return + 1.4 * (11.2% - Risk free return)

13.6% = Risk free return + 1.4 * 11.2% - Risk free return * 1.4

13.6% = Risk free return + 15.68%- 1.4 Risk free return

13.6% - 15.68% = Risk free return - 1.4 Risk free return

-2.08 = -0.4 Risk free return

Risk free return = 2.08 / 0.4

Risk free return = 5.2%

Therefore risk free rate will be 5.2%