You work for BSC Advisors, a major real estate investment manager. You are trying to convince a pension fund manager to allocate 10% of her portfolio to investment-grade income-property. Currently the fund is allocated 60% to stocks and 40% to bonds. Suppose you agree with Bobs asset class risk and return expectations shown in Exhibit 21-1a. Perform the following calculations, and then explain how you would use the results to persuade the pension fund portfolio manager to allocate funds to real estate. Be prepared to discuss the limitations of your analysis.{Help: A portfolio comprised of three asset classes (1, 2 & 3) has expected return, E[Rp], and standard deviation of returns (volatility),

a. Determine the expected return and standard deviation of returns on the current portfolio (60% stocks/40% bonds).

b. Determine the expected return and standard deviation of returns on a portfolio comprised of 55% stocks, 35% bonds and 10% real estate