A. Tangency Portfolio: Suppose it is the start of year 2025. You have $100,000 to invest and decide to invest in a combination of a riskless asset (f), a stock index fund (S) and a long-term bond fund (B), with the following properties: E(r) Riskless Asset (1) Stock index fund (S) 0.19 Long-term bond fund (B) 0.10 The correlation of the returns on the long-term bond fund and the stock index fund is equal to 0.3. 0.03 [3%) 0.12 0.055 0.00 1. If you only consider the risky assets, what is the global minimum variance portfolio? What is the global minimum variance portfolio if you also consider the risk-free asset? 2. What is the tangency portfolio (i.e., mix) of the risky assets S and B? may of 3. What are the portfolio weights of a portfolio that is 80% the tangency portfolioand 20% the risk-free asset? 4. What dollar amounts should be invested in each of the three asset classes f, S, and B if you would like to achieve (for the year 2025] an expected return of 8% with the lowest possible standard deviation? What is the standard deviation of the (percentage) return on this portfolio? 5. For the year 2025, the realized return on f was 0.03 (3%), the realized return onB was 0.10 (10%) and the realized return on S was -0.40 (-40%). At the end of 2025, what are your dollar holdings of f, of B and of S, and how much money do you have in total? What is your realized (percentage) portfolio return for year 2025? 6. What is stock index's a and with a tangency portfolio benchmark?

A. Tangency Portfolio: Suppose it is the start of year 2025 . You have $100,000 to invest and decide to invest in a combination of a riskless asset (f), a stock index fund (S) and a long-term bond fund (B). with the following properties: The correlation of the returns on the long-term bond fund and the stock index fund is equal to 0.3 . 1. If you only consider the risky assets, what is the global minimum variance portfolio? What is the global minimum variance portfolio if you also consider the risk-free asset? 2. What is the tangency portfolio (i.e., mix) of the risky assets S and B ? 3. What are the portfolio weights of a portfolio that is 80% the tangency portfolioand 20% the risk-free asset? 4. What dollar amounts should be invested in each of the three asset classes f,S, and B if you would like to achieve (for the year 2025) an expected return of 8% with the lowest possible standard deviation? What is the standard deviation of the (percentage) return on this portfolio? 5. For the year 2025, the realized return on f was 0.03(3%), the realized reirurn onB was 0.10(10%) and the realized return on S was 0.40(40%). At the end of 2025 , what are your dollar holdings of f, of B and of S, and how much money do you have in total? What is your realized (percentage) portfolio return for year 2025 ? 6. What is stock index's and with a tangency portfolio benchmark