An analyst has identified a portfolio that they consider optimal, made up of two diversified managed funds. Summary statics are provided for the two investment funds in the table below:

summary statistics	managed fund one	managed fund two
expected return	12%	8%
standard deviation	30%	20%

The correlation coefficient between the two funds is 0.10

The risk free rate of return available in the market is 5%.

A) The analyst stated that it is optimal to invest 55% in fund one and 45% in fund two, compute the optimal risky portfolios expected return and standard deviation?

B) Assume that an investor wants to reduce the risk of their portfolio by investing 20% in the risk free asset. The remaining 80% of funds available for investment purposes are invested according to the proportions outlined above in A). Compute the new portfolios expected return and standard deviation?