4. You are considering three assets. The first is a stock fund, the second is a bond fund, and the third is a risk-free asset. These are their expected returns and standard deviations: E(r StDev(r) Stock Fund (S) 15% 126 Bond Fund (B) 9% 23% Risk-Free Asset (RF) 5.5% 0% The correlation between S and B is 0.15. a. Compute the expected return and standard deviation for the following portfolios: 100% in S, 0% in B, 0% in RF (Portfolio 1) 0% in S, 100% in B, 0% in RF (Portfolio 2) 70% in S, 30% in B, 0% in RF (Portfolio 3) b. The third portfolio turns out to be the tangency portfolio. Use this information along with the expected return and standard deviation computed for the other two portfolios to sketch the investment opportunity set when investing in $ and B only. C. Now add to your sketch, the best feasible Capital Allocation Line (CAL). What is the slope of the best feasible CAL? d. Suppose now, you decide to invest on the best feasible CAL and want an expected return of 12%. What is the standard deviation of your portfolio? What is the proportion invested in RF and the proportion invested in S and B combined. What is the proportion invested in S and B separately