please complete 1-5

QUESTIONS 1 TO 5 ARE BASED ON THE INFORMATION BELOW: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields 5%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock Fund (s) Bond Fund (b) 8% 10% The Correlation between the stock fund and bond fund is 0.3. Do the problems below. 1. What are the investment proportions of the minimum-variance portfolio of the two risky funds, and what is the expected value and standard deviation of its rate of return? 2. What are the proportions of each asset and the expected return and standard deviation of the optimal risky portfolio? 3. What is the reward-to-variability ratio of the best feasible Capital Allocation Line? 4. You require that your portfolio yield an expected return of 12% and that it be efficient on the best feasible Capital Allocation Line. What is the standard deviation of your portfolio? What is the proportion invested in the T-bill and each of the two risky funds? 5. If you were to use only the two risky funds above - the Stock fund and the Bond fund - and still require an expected return of 12%, what must be the investment proportions of your portfolio? How does the standard deviation of this portfolio compare with that of the optimized portfolio on the best feasible Capital Allocation Line in Question 4 above, and why? QUESTIONS 1 TO 5 ARE BASED ON THE INFORMATION BELOW: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields 5%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock Fund (s) Bond Fund (b) 8% 10% The Correlation between the stock fund and bond fund is 0.3. Do the problems below. 1. What are the investment proportions of the minimum-variance portfolio of the two risky funds, and what is the expected value and standard deviation of its rate of return? 2. What are the proportions of each asset and the expected return and standard deviation of the optimal risky portfolio? 3. What is the reward-to-variability ratio of the best feasible Capital Allocation Line? 4. You require that your portfolio yield an expected return of 12% and that it be efficient on the best feasible Capital Allocation Line. What is the standard deviation of your portfolio? What is the proportion invested in the T-bill and each of the two risky funds? 5. If you were to use only the two risky funds above - the Stock fund and the Bond fund - and still require an expected return of 12%, what must be the investment proportions of your portfolio? How does the standard deviation of this portfolio compare with that of the optimized portfolio on the best feasible Capital Allocation Line in Question 4 above, and why