A pension fund manager is considering three mutual funds. The first is a stock fund,...
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A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 8%. The characteristics of the risky funds are as follows:
| Expected Return | Standard Deviation | |||||
| Stock fund (S) | 20 | % | 30 | % | ||
| Bond fund (B) | 12 | 15 | ||||
The correlation between the fund returns is 0.10. Tabulate the investment opportunity set of the two risky funds. (Round your answers to 2 decimal places.)
Proportionn in stock Fund% from 0.0,20.00,40,60,80,100%
Proportion in Bond Fund 100,80,60,40,20,0%
Find Expected return and Standard deveation for all Combinations
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