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Question 7 1 pts There are two risky assets, debt and equity. The expected return is 8% on the debt and 13% on the equity.
Question 7 1 pts There are two risky assets, debt and equity. The expected return is 8% on the debt and 13% on the equity. The standard deviation is 12% for the debt and 20% for the equity. The correlation coefficient between the debt return and the equity return is 30%. The risk-free rate is 4%. What are the weights of the debt and equity in the optimal portfolio? 48.7% 50.8% 30.6% 40.4%
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