The expected returns on the VBINX and PRWCX funds are 17% and 8% with standard deviations of 60% and 10%, respectively. The correlation between these funds is 0.1, and the yield on 90-day T-Bills is 2%. If you wish to construct the optimal risky portfolio on the investment opportunity set comprised of these two assets, how should you allocate your investment between these funds? IF using Excel, please show all steps.

Given the weights you computed in question 1, what is the (a) expected return, (b) risk, and (c) Sharpe ratio for the RISKY portfolio comprised of your two risky funds?

Given the information from questions 1 and 2, what would be the (a) expected return, (b) risk, and (c) Sharpe ratio of your COMPLETE portfolio, given you invest 70% in the optimal risky portfolio and the remainder in risk-free T-bills.