How would you solve the below?

Suppose you have some money to invest for simplicity, $1 and you are planning to put a fraction w into a stock market mutual fund and the rest, 1-w , into a bond mutual fund. Suppose that $1 invested in a stock fund yields R_s after 1 year and that $1 invested in a bond fund yields R_b, suppose that R_s is random with mean 0.08(8%) and standard deviation 0.07, and suppose that R_b is random with mean 0.05(5%) and standard deviation 0.04. The correlation between R_s and R_b is 0.26. If you place a fraction w of your money in the stock fund and the rest, 1-w , in the bond fund, then the return on your investment is R=wR_s + (1 -w)R_b .

Suppose that w = 0.52. Compute the mean and standard deviation of R

1) The mean is?

2) The standard deviation is?

Suppose that w = 0.77. Compute the mean and standard deviation of R.

3) The mean is?

4) The standard deviation is?

What value of w makes the mean of R as large as possible?

5) W= ____ Maximizes

What is the standard deviation of R for this value of w?

6) = _____ or this value of w

What is the value of w that minimizes the standard deviation of R?

7) W = ____ minimizes the standard deviation of R