A pension fund manager is considering three mutual funds. The first is a stock fund, the...

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Finance

A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fundthat yields a sure rate of 5.6%. The probability distributions ofthe risky funds are:

Expected Return Standard Deviation
   Stock fund (S) 17%         46%
   Bond fund (B) 8%         40%

The correlation between the fund returns is .0600.

What is the expected return and standard deviation for theminimum-variance portfolio of the two risky funds? (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)

  Expected return %
  Standard deviation %

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To find the fraction of wealth to invest in Stock fund that willresult in the risky portfolio with minimum variance the See Answer

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A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fundthat yields a sure rate of 5.6%. The probability distributions ofthe risky funds are: Expected ReturnStandard Deviation Stock fund (S)17% 46% Bond fund (B)8% 40% The correlation between the fund returns is .0600. What is the expected return and standard deviation for theminimum-variance portfolio of the two risky funds? (Do notround intermediate calculations. Round your answers to 2 decimalplaces.) Expected return% Standard deviation%

	Expected Return	Standard Deviation
Stock fund (S)	17%	46%
Bond fund (B)	8%	40%