I agree with AppleOnYa and Patches. I think it's a stretch to think that Fredo knew, and it's over-analyzing the scene. After all the time that passed since the argument with Micheal, Fredo would have been lulled into believing he was safe. Also, he always lacked the killer instinct and street smarts that would have been required to figure it out.
What have I done that you would treat me so disrepectfully?
