Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, Is The characteristics of two of the stocks are as follows: Stock 3 Correlation-1 Expected Return Standard Deviation 118 200 658 358 a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be substituted for the risk-free asset?) (Round your answer to 2 decimal places.) Rate of return A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 5.6%. The probability distribution of the risky funds is as follows: Expected Return 178 Stock fund (S) Bond fund (D) Standard Deviation 460 40 The correlation between the fund returns is 0.16. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round Intermediate calculations and round your final answers to 2 decimal places, Omit the "%" sign in your response.) % % Portfolio invested in the stock Portfolio invested in the bond Expected return Standard deviation % %