Tom is considering to take his retirement portfolio into international

and local investments. He has the following information

Tom who is risk adverse has three options: i) Invest only in S&P 500 ii) Invest

only in the international fund or iii) Invest equally his money in above assets. Help

out Freddy to decide. Also you must know that correlation coefficient () between

above assets is -0.65.

Investment Fund S&P 500 Fund International Fund Expected return 12.4% 14% Standard deviation 20% 30%