A retiree nearing retirement has asked for your impression of their retirement portfolio. The retiree's portfolio is very simple - choices were limited to a few Vanguard mutual funds and the retiree has only invested in two. The first is a Vanguard mutual fund, VFIAX-this is a passive investment in the S&P500 Index, and the retiree currently has $650K invested in this fund. The second is a well-diversified bond portfolio, also a Vanguard mutual fund, VBTLX; the retiree currently has $350K invested in this fund? The following data was estimated using two-years' of daily trading data: VFIAX VBTLX Mean Daily Return 0.09% Daily estimated standard deviation 1.64% 0.02% 0.28% During this period, the correlation between the two funds' returns was -23.8%. Using this data, estimate the 1% DEAR for this portfolio. (7 points)