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 rate of 2%. The probability distribution of the funds is as follows:

	Expected Return	Standard Deviation
Stock fund (S)	0.200	0.400
Bond fund (B)	0.100	0.150
Risk-Free	0.020
Correlation	0.200

1. a) Find the investment proportions in the minimum variance portfolio (MVP) of the two risk asset

2. b) What portion of your wealth should go to S and B respectively to achieve the tangent portfolio (i.e., the portfolio with the highest Sharpe ratio)

3. c) Draw the minimum variance frontier and the efficient variance frontier