A pension fund manager is considering two mutual funds. The first is a stock fund and the second is a long-term government and corporate bond fund. In the following, you see the info for both funds.

Expected Return Standard Deviation

Stock fund (S) 10% 39%

Bond fund (B) 4% 23%

The correlation between the fund returns is 0.0721.

If the fund manager decides to invest 60% of the money in Stock Fund and remaining 40% on Bond Fund, find the expected return and variance for this portfolio.

Please show all your work.