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% 38% Bond fund (B) 10% 29% The correlation between the fund returns is 0.20.

What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds?

What is the Sharpe ratio of the best feasible CAL?