QUESTION 1: The management team for the Northwestern University Foundation has asked for your help in managing funds for the foundation. They want you to assist in allocating money using these three assets: Treasury bills (risk free) Expected return: 3% Bond Index Fund Expected return: 6% Standard deviation: 10% Stock Fund Expected return: 12% Standard deviation: 20% You are considering creating a portfolio that consists only of the risky assets: Bond Index Fund Stock Fund The correlation between the two risky funds is 0.25 e. Calculate the standard deviation of the optimal risky portfolio (3 points) f. Calculate the Sharpe ratio for the optimal risky portfolio. (3 points)(Hint: use your answers from (d) and (e) above). g. Explain why the optimal risky portfolio is optimal. (2 points)