You are considering the following investments in a US stock index fund (Fund S) and a US bond index fund (Fund B). These represent the only 2 investments available to you at this time. You have the following additional information:

Window Help Word File Edit View Sun Jan 26 9:26 PM Insert Format Tools Table Q. Search in Document we MT S20 (1) + Share a View Insert Draw Design References Mailings Review Home Layout Cambria (Hea. A- A- Aa 12 Da DdE AaB ADdE AaBbCcDdE AaBbCcD AaBbCcDdE AaBbCcDdEe BcDdI I U - abe X2 x2 Paste Styles Pane Emphasis Heading 1 Normal Strong Subtitle Title No Spacing 2. You are considering the following investments in a US stock index fund (Fund S) and a US bond index fund (Fund B). These represent the only 2 investments available to you at this time. You have the following additional information: US Bond Index (Fund B) US Stock Index (Fund S) 16% Expected Return 8% 20% 0.0400 12% 0.0144 Standard Deviation Variance 0.50 PsB Covariance (S,B) 0.01200 a. Calculate the weights for Fund S and Fund B for the Minimum Variance Portfolio. Show your work (if you are using Solver in Excel, include a screenshot of your Solver setup). (3 points) i. Calculate the Expected Return and Standard Deviation of the Minimum Variance Portfolio of Fund S and Fund B. (4 points) b. Suppose you have a target expected return of 10% for your portfolio. i. Calculate the weights of the Fund S/Fund B portfolio that satisfies this requirement. (5 points) ii. Calculate the standard deviation of the Fund S/Fund B portfolio with E(r) = 10%. Show your work. (8 points) Page 5 of 11 41 of 1687 words O Focus English (United States) 113% JAN POF tv 26