A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 16% 36% Bond fund (B) 10% 27% The correlation between the fund returns is 0.10. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. What is the Sharpe ratio of the best feasible CAL? Suppose now that your portfolio must yield an expected return of 13% and be efficient, that is, on the best feasible CAL. What is the standard deviation of your portfolio? What is the proportion invested in the T-bill fund? What is the proportion invested in each of the two risky funds?