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Use the following information to answer Questions 1-10. Probability 0.25 0.25 0.20 0.30 Equity returns -8% 5% 14% 28% Debt returns -4% 3% 4% 6%

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Use the following information to answer Questions 1-10. Probability 0.25 0.25 0.20 0.30 Equity returns -8% 5% 14% 28% Debt returns -4% 3% 4% 6% Risk-free rate Correlation, pare 0.75% 0.3690 1. (1.25 points) What is the expected return of the debt investment? Round to the nearest 0.01%. 2. (1.25 points) What is the expected return of the equity investment? Round to the nearest 0.01% 3. (1.25 points) What is the expected standard deviation of the debt investment? Round to the nearest 0.01. 4.((1.25 points) What is the expected standard deviation of the equity investment? Round to the nearest 0.01. 5. (1.25 points) What is the optimal weight of the debt in the risky portfolio? Round to the nearest 0.01% 6. (1.25 points) What is the expected return of the optimally risky portfolio? Round to the nearest 0.01% 7. (1.25 points) What is the standard deviation of the optimally risky portfolio? Round to the nearest 0.01 8. (1.25 points) What is the optimal allocation of risk-free assets in the complete portfolio? Assume a risk aversion of 2. Round to the nearest 0.01%. 9. (1.25 points) What is the optimal weight of the equity in the complete portfolio? Round to the nearest 0.01%. 10. (1.25 points) What is the Sharpe ratio of the optimally risky portfolio? Round to the nearest 0.01

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