Given the following information about a stock fund S and a bond fund B

E(r_S) = 15%, s_S = 35%,

E(r_B) = 9%, s_B = 23%, r = 0.15, R_f = 5.5%

a. Calculate the risk (s) of a portfolio made of 60% invested in the stock fund and 40% in the bond fund call this new portfolio L

b. Calculate the weights of the minimum variance portfolio. Is there any benefit from diversification? Explain.

c. If the correlation coefficient was r =-1 would portfolio the portfolio be more attractive . Explain