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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, page 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%

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