a) Having successfully completed your finance studies at the ANU, you embark on an exciting career as a fund manager. One of your first assigned tasks is to create a suitable portfolio for a client, from among the existing products offered by the firm. You identify two existing portfolios offered by the firm, a stock portfolio and a bond portfolio, which you intend on using as the basis for creating the client's portfolio. The stock portfolio has an expected return of 8% and a standard deviation of 19%, and the bond portfolio has an expected return of 5% and a standard deviation of 12%. The rate of return on T-bills is currently 3%. i) Your client advises that she would like her portfolio to consist of 72% stocks, 18% bonds, and the remainder being T-bills. If the covariance between the stock and bond portfolios is 125, what is the return and standard deviation of her desired portfolio? (2 Marks) ii) Your client is concerned about the level of risk of the portfolio in i) above. Instead, she would like the returns of her portfolio to have a standard deviation of no more than 13%. Assuming the security selection and weightings within the risky component of her portfolio remains unchanged, what would be the composition of the complete portfolio that would achieve her desired level of risk, and what would be the expected return on this portfolio? (4 Marks)