Suppose that you want to make a portfolio that consists of a corporate bondfund, X, and a common stockfund, Y. For a$1,000 investment, the expected return for X is $ 76 and the expected return for Y is $ 95.The variance for X is 1,625 and the variance for Y is 12,450. The covariance of X and Y is 3,354. Complete parts(a) through(d).

a. Compute the portfolio expected return and portfolio risk if you put $300 in the corporate bond fund and $700 in the common stock fund.

The portfolio expected return is ________?

The portfolio risk is __________?

(Round to two decimal places as needed.)

b. Compute the portfolio expected return and portfolio risk if you put $500 in each fund.

The portfolio expected return is __________?

The portfolio risk is ____________?

(Round to two decimal places as needed.)

c. Compute the portfolio expected return and portfolio risk if you put $800 in the corporate bond fund and $200 in the common stock fund.

The portfolio expected return is _____________?

The portfolio risk is ______________?

(Round to two decimal places as needed.)

d. On the basis of the results of (a) through (c), which portfolio would you recommend? Explain.

A risk-averse investor would invest in the one with 80, 50, or 30% in X because it has the lowest risk, the lowest expected return, the highest risk, the highest expected return, or a good expected return and the highest risk

, whereas a risk taker would invest in the one with 50, 30, 80% in X because it has the highest risk, the highest expected return, a good expected return and the lowest risk, the lowest expected return, or the lowest risk

.