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QUESTION 15 You are considering three mutual funds. The first is a stock fund, the...

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QUESTION 15 You are considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 3%. The stock fund has an expected return of 15% and a variance of 0.25. The bond fund has an expected return of 8% and a variance of 0.09. The correlation coefficient between the stock and bond funds is 0.16. If you desire to invest in a portfolio that consists of the stock and money market funds such that your portfolio will yield an expected return of 18%, what is the standard deviation of your portfolio? A. 0.625 B. 0.125 C. 0.375 D. 0.391

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