(1)A US based MNC plans to invest in a new project EITHER in US or in Mexico. The new project is expected to take up a quarter of the firm's total investment fund. The balance of the corporation's investment is exclusively in an existing US project. The features of the proposed new project are as follows: Existing US project US project (new) Mexico project (new) 10% 0.10 15% 0.11 15% 0.12 Expected rate of return E(R) Standard deviation of E(R) Correlation of returns from new project with returns on existing US project 0.95 -0.05 Based on considerations of risk and return, determine the portfolio the MNC should choose if the goal is to generate more stable returns