Please show work through Excel

1. Asset Allocation Your client is considering three mutual funds: a stock fund, a real estate fund and a T-bill money market fund. The sure return of the T-bill fund is 6%. The expected return and standard deviation for the stock fund and the real estate fund are given in the following table. The correlation between the stock fund and the real estate fund returns is 0.2 (i.e., p=0.2) Risky Assets Stock Fund (S) Real Estate Fund (R) Expected Return 15% 10% Standard Deviation 20% 15% (1) Your client notice that the stock funds and real estate funds have positive correlation, and state that there is no benefit of diversification in investing in the two funds. Is your client right? Explain to your client what you think. 1. Asset Allocation Your client is considering three mutual funds: a stock fund, a real estate fund and a T-bill money market fund. The sure return of the T-bill fund is 6%. The expected return and standard deviation for the stock fund and the real estate fund are given in the following table. The correlation between the stock fund and the real estate fund returns is 0.2 (i.e., p=0.2) Risky Assets Stock Fund (S) Real Estate Fund (R) Expected Return 15% 10% Standard Deviation 20% 15% (1) Your client notice that the stock funds and real estate funds have positive correlation, and state that there is no benefit of diversification in investing in the two funds. Is your client right? Explain to your client what you think