For the next 7 questions suppose the following probability distribution for Stock Fund (S) and Bond...

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Finance

For the next 7 questions suppose the following probabilitydistribution for Stock Fund (S) and Bond Fund (B) holds:
Expected Return
SD (?)
Correlation Coefficient
Bond Fund
10%
10%
0
Stock Fund
15%
25%

What is the covariance between the Stock Fund and the BondFund?
-120
-100
-75
-60
0
What is the expected return on a portfolio which is 40% investedin the stock fund and the rest in the bond fund?
10%
12%
13%
14%
16%
What is the standard deviation of the return on the aboveportfolio?
9.98%
10.58%
11.66%
13.56%
14.56
Now, introduce the risk-free asset. If the risk-free rate ofreturn is 8%, what is the proportion of the optimal (tangent) riskyportfolio, invested in Stock Fund?
15.33%
18.18%
23.33%
33.33%
35.90%
What is the expected return on the optimal (tangent) riskyportfolio?
11.67%
11.80%
13.33%
14.87%
15.17%
What is the standard deviation of the return on the optimal(tangent) risky portfolio?
9.21%
9.57%
10.67%
11.03%
13.54%

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For the next 7 questions suppose the following probabilitydistribution for Stock Fund (S) and Bond Fund (B) holds:Expected ReturnSD (?)Correlation CoefficientBond Fund10%10%0Stock Fund15%25%What is the covariance between the Stock Fund and the BondFund?-120-100-75-600What is the expected return on a portfolio which is 40% investedin the stock fund and the rest in the bond fund?10%12%13%14%16%What is the standard deviation of the return on the aboveportfolio?9.98%10.58%11.66%13.56%14.56Now, introduce the risk-free asset. If the risk-free rate ofreturn is 8%, what is the proportion of the optimal (tangent) riskyportfolio, invested in Stock Fund?15.33%18.18%23.33%33.33%35.90%What is the expected return on the optimal (tangent) riskyportfolio?11.67%11.80%13.33%14.87%15.17%What is the standard deviation of the return on the optimal(tangent) risky portfolio?9.21%9.57%10.67%11.03%13.54%

	Expected Return	SD (?)	Correlation Coefficient
Bond Fund	10%	10%	0
Stock Fund	15%	25%	0