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 4%. 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. You require that your portfolio yield an expected return of 12%, and that it be efficient, that is, on the steepest feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.)

SD = ?% b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.)

	Proportion Invested
Money Market Fund	?%
Stocks	?%
Bonds	?%