You are discussing your retirement plan with Emma Li when she mentions that Maureen OBrien, a representative from TD Financial Services, is visiting your office today. You decide that you should meet with Maureen, so Emma sets up an appointment for you later in the day. When you sit down with Maureen, she discusses the various investment options available in the companys retirement plan. You mention to Maureen that you researched your new employer before you accepted your new job. Analysis of the company has led to your belief that the company is growing and will achieve a grater market share in the future. You also feel you should support your employer. Given these considerations, along with the fact that you are a conservative investor, you are leaning toward investing 100% of your retirement amount in the company you now work for.

Assume the risk-free rate is the historical average T-Bill rate of 3.4%. The correlation between the TD Large-Cap Stock Fund and the TD Bond Fund is 0.15. Note that the spreadsheet graphing and Solver in Excel may assist you in answering the questions.

1. Would some other investors who are considering investing in the TD Large-Cap Stock Fund, the TD Bond Fund, and the risk-free asset find it efficient to short sell one of the two risky funds? Explain.