Question: Expected Return Standard Deviation Russell Fund 16% 12% Windsor Fund 14% 10% S&P Fund 12% 8% The correlation between the returns on the Russel Fund

Expected Return Standard Deviation Russell Fund 16% 12% Windsor Fund 14% 10% S&P Fund 12% 8% The correlation between the returns on the Russel 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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