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)		22	%			38	%
Bond fund (B)		12				16
The correlation between the fund returns is 0.10. a-1. What are the investment proportions in the minimum-variance portfolio of the two risky funds? Portfolio invested in the stock: Portfolio invested in the bond: What are the expected value and standard deviation of its rate of return? Expected return: Standard deviation: