Question: 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

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%. If an investor invest 40% of her money in the debt and 60% in the equity. what is the expected return on her portfolio? 10% 12% 13% 11%

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