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

Expected Return Standard Deviation Stock fund (S) 23 % 29 % Bond fund (B) 14 17

The correlation between the fund returns is 0.12. a-1. What are the investment proportions in the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)

Portfolio invested in the stock:

Portfolio invested in the bond:

a-2. What are the expected value and standard deviation of the minimum-variance portfolio rate of return? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)

Expected return:

Standard deviation:

rev: 01_07_2021_QC_CS-246004