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 4.0%. The probability distributions ofthe risky funds are:

Expected Return Standard Deviation
   Stock fund (S) 10%         32%
   Bond fund (B) 7%         24%

The correlation between the fund returns is .1250.

What is the reward-to-volatility ratio of the best feasible CAL?(Do not round intermediate calculations. Round your answerto 4 decimal places.)

  Reward-to-volatility ratio

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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 4.0%. The probability distributions ofthe risky funds are: Expected ReturnStandard Deviation Stock fund (S)10% 32% Bond fund (B)7% 24% The correlation between the fund returns is .1250. What is the reward-to-volatility ratio of the best feasible CAL?(Do not round intermediate calculations. Round your answerto 4 decimal places.) Reward-to-volatility ratio

	Expected Return	Standard Deviation
Stock fund (S)	10%	32%
Bond fund (B)	7%	24%