Question: 1- Consider a portfolio with two assets. Asset A comprises 15% of the portfolio, has a standard deviation of 16%, and a correlation with the

1- Consider a portfolio with two assets. Asset A comprises 15% of the portfolio, has a standard deviation of 16%, and a correlation with the market index of 0.75. Asset B has a standard deviation of 8% and a correlation with the market index of 0.15. If the market returns and the standard deviation of returns on the market are 12% and 10% respectively, and the risk-free rate is 3%, what is the portfolio's required rate of return? What is the required rate of return? (%)

2- You buy a bond with, 10.5% annual coupon at par value, with 20 years until maturity. After 3 years of purchasing the bond, interest rates increase by 2.5% p.a. and remain constant until you sell it in 7 years time (after 4 years of increasing interest rate). What is your Realized Compound Yield (RCY) on this bond?

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