A pension fund manager is considering three mutual funds: a stock fund, a long-term bond fund and a money market fund that provides a risk-free return of 8%. The first two moments of the risky funds are as follows:

The weight of stock fund in a minimum variance portfolio of stock and bond funds is 0.18. Compute the correlation between the returns of stock fund and bond fund.

\begin{tabular}{|l|l|l|} \hline & Expected return & Standard deviation \\ \hline Stock fund (S) & 15% & 30% \\ \hline Bond fund (B) & 12% & 15% \\ \hline \end{tabular}