Question: Problem 2 (15 points) - Given E[rd] = 12% and E[re] = 17% op = 15% and o E = 20% PDE = -0.3 and

Problem 2 (15 points) - Given E[rd] = 12% and E[re]

Problem 2 (15 points) - Given E[rd] = 12% and E[re] = 17% op = 15% and o E = 20% PDE = -0.3 and rf 5% (a) Calculate the weights of debt and equity in the minimum-variance portfolio. (b) Calculate the corresponding expected return, risk (i.e., standard deviation), and the Sharpe ratio of the minimum-variance portfolio. (c) Given the risk portfolio as the minimum-variance portfolio and A 4, construct the complete portfolio. That is, how much percentage the investor wants to invest in the risk-free asset and how much percentage he/she wants to invest in the risk asset. Then, calculate the expected return, standard deviation, and the Sharpe ratio of the complete portfolio. (Hint:y* Erp]="4]

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