Question: 3. Consider the following data: Expected Return Standard Deviation Russell Fund Windsor Fund S&P Fund 16% 14% 12% 12% 10% 8% The correlation between

3. Consider the following data: Expected Return Standard Deviation Russell Fund Windsor

3. Consider the following data: Expected Return Standard Deviation Russell Fund Windsor Fund S&P Fund 16% 14% 12% 12% 10% 8% The correlation between the returns on the Russell Fund and the S&P Fund is .7. The rate on T-bills is 6%. Which of the following portfolios would you prefer to hold in combination with T-bills and why? (a) Russell Fund (b) Windsor Fund (c) S&P Fund (d) A portfolio of 60% Russell Fund and 40% S&P Fund.

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