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QUESTION 1 Q1 and Q2 are based on the following informations. Suppose the expected return of equity is erg -13%, the expected return of debt

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QUESTION 1 Q1 and Q2 are based on the following informations. Suppose the expected return of equity is erg -13%, the expected return of debt is EV p) -8%. The standard deviation of equity is -20%, the standard deviation of debt is 0p=12%. Compute the portfolio opportunity set for the debt and equity funds when the correlation coefficient between them is p=0.25. The global minimum-variance portfolio is constructed so that: We (Rounded to 4 decimals) Wp (Rounded to 4 decimals) QUESTION 2 Based on the results of the previous question, calculate the expected return and standard deviation of the portfolio Expected return: Erp) % (Rounded to 2 decimals) Standard deviation: 0,- % (Rounded to 2 decimals)

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