Question 1 (11 points) You are considering three Smartshares funds. The first is an equity fund, the second is a bond fund, and the third is a money market fund that yields a rate of 5%. The return and risk parameters of the two risky funds are as follows: Expected Return I Standard Deviation Equity Fund (S) 21% 39% Bond Fund (B) 14% 20% For questions a, b, c, assume that the correlation between the fund returns is 0.4. a. (3 pts) What is the proportion of each asset (equity, bond) in the optimal risky portfolio? b. (3 pts) Based on your answer in part (a), calculate the expected return and standard deviation of the optimal risky portfolio. c. (3 pts) The borrowing rate that a client faces is 12% and the lending rate is 5%. Using the parameters of the optimal risky portfolio calculated in part (b), what is the range of risk aversion for which a client will neither borrow nor lend? d. (2 pts) For this question only, assume that the equity fund and the bond fund have a perfectly negative correlation. Calculate the weight of each fund in the global minimum variance portfolio