2. Jeffrey is currently holding a $2 mil portfolio as follows: Value % of Totale Expected Annual Standard Annual Returne Deviation 100 4.6% 1.6% 0.2 mile 0.6 mile 30 12.4% 19.5% Short-term bonds Large-Cap Equities Small-Cap Equitiese Totale 1.2 mile 602 16.0% 29.9% 2.0 mile 1002 13.8% 23.1% Moreover, he is so lucky that he will have another $2.0 mil so that he is going to invest the additional amount in an index fund. Suppose you are Jeffrey's financial planner and you are evaluating 4 index funds for him to form a portfolio which should meet 2 criteria relative to his current portfolio: D Maintain or enhance the expected return, and, i1) Maintain or reduce the volatility- Here are the details of these 4 index funds Index Funde Expected Annual Return Expected Annual Standard Deviatione . 15% 11% 16% Be Correlation of returns to current portfolio I 0.802 0.600 0.90 0.65 25% 22% 25% 22% Da Discuss your suggestion to Jeffrey. You should justify your choice and describe how the chosen fund can best meet the two criteria (5 marks for calculation: 5 marks for discussion and comment) 2. Jeffrey is currently holding a $2 mil portfolio as follows: Value % of Totale Expected Annual Standard Annual Returne Deviation 100 4.6% 1.6% 0.2 mile 0.6 mile 30 12.4% 19.5% Short-term bonds Large-Cap Equities Small-Cap Equitiese Totale 1.2 mile 602 16.0% 29.9% 2.0 mile 1002 13.8% 23.1% Moreover, he is so lucky that he will have another $2.0 mil so that he is going to invest the additional amount in an index fund. Suppose you are Jeffrey's financial planner and you are evaluating 4 index funds for him to form a portfolio which should meet 2 criteria relative to his current portfolio: D Maintain or enhance the expected return, and, i1) Maintain or reduce the volatility- Here are the details of these 4 index funds Index Funde Expected Annual Return Expected Annual Standard Deviatione . 15% 11% 16% Be Correlation of returns to current portfolio I 0.802 0.600 0.90 0.65 25% 22% 25% 22% Da Discuss your suggestion to Jeffrey. You should justify your choice and describe how the chosen fund can best meet the two criteria (5 marks for calculation: 5 marks for discussion and comment)