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Data: R Z =14.5% ; r f =2% ; and Z =4% If the expected rates of return and levels of risk for the Capital

Data: RZ=14.5%; rf=2%; and Z=4%

If the expected rates of return and levels of risk for the Capital Allocation Line value was y=2 is leverage being used? What are the two outcomes of leverage?

Note: Answer in terms of risk and return.

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