can someone explain the question and the solution
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We can also raise private capital using loans or debt. So option a is incorrect
Not necessary both either in equity of the clients firm or debt of the clients firm. So option c is incorrect
private capital is different from both equity markets and debts markets as funding is not taken from any of them, so they have a correlation coefficient less than 1. So diversification benefits from both equity and bond markets
TO EXPLAIN WHY OPTION C IS NOT CORRECT YOU CAN THINK OF IT IN A WAY THAT, IF WE RAISE BOTH PRIVATE EQUITY AND PRIVATE DEBT FROM THE SAME COMPANY, THEN THE RISK THAT THE INVESTOR WILL BE FACING WILL BE TOO HIGH BECAUSE IF THE BORROWER DEFAULTS THE LOSS ON BOTH PRIVATE EQUITY AND DEBT COMES UNDER CIRCUIT.