hint : The strategic asset allocation that is most appropriate for Thomas as follows:

The efficient portfolio that satisfies Thomas's return and risk objectives must lie on the portion of the efficient frontier represented between Corner Portfolio 3 (with 9.67 expected return) and Corner Portfolio 4 (with 7.92 percent expected return). Based only on the information given and the IPS, the recommended portfolio is the one that just meets his 8.5 percent return objective. From the corner portfolio theorem, it follows that: 8.50 9.67w + 7.92(1 -w) We find that the weight on Corner Portfolio 3 is w 0.331 and the weight on Corner Portfolio 4 is (1- w) 0.669. Therefore, weight of UK equities 0.33163.56%) + 0.669(36.19%)-45.25% weight of ex-UK. equities 0.331(6.25%) + 0.669(4.05%)-4.78% weight of intermediate bonds 0.3310%) + 0.6690%)-0% Weight of long-term bonds 0.331(0%) + 0.6690%)-0% weight of international bonds 0.331096) + 0.669(30.48%)-20.39% weight of real estate 0.331(30.19%) + 0.669(29.28%)-29.58% As an arithmetic check, 45.25% + 4.78% + 0% + 0% + 20.39% + 29.58%-100%