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4. Suppose an investor is considering to invest in three assets: a stock fund (S), a bond fund (B), and a riskless monetary fund with

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4. Suppose an investor is considering to invest in three assets: a stock fund (S), a bond fund (B), and a riskless monetary fund with a rate of 8%. The assets information is as follows: Expected return Standard deviation Stock 20% 30% Bond 12% 15% The correlation coefficient between these two risky assets is 0.1. (1) Suppose the investor cannot borrow money, and want to hold a portfolio consisting of security and bond. The target expected retum is 24% What are the proportions invested in each security? And what's the risk of this portfolio? (2) Suppose now, the investor can borrow money at the riskless interest rate of 8%. what's the risk now for the same target expected return? 4. Suppose an investor is considering to invest in three assets: a stock fund (S), a bond fund (B), and a riskless monetary fund with a rate of 8%. The assets information is as follows: Expected return Standard deviation Stock 20% 30% Bond 12% 15% The correlation coefficient between these two risky assets is 0.1. (1) Suppose the investor cannot borrow money, and want to hold a portfolio consisting of security and bond. The target expected retum is 24%. What are the proportions invested in each security? And what's the risk of this portfolio? (2) Suppose now, the investor can borrow money at the riskless interest rate of 8% what's the risk now for the same target expected retum

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