Question: Problem 3 (continued) A pension fund manager is considering these mutual funds. The first is a stock fund, and the second is a long-term government

Problem 3 (continued) A pension fund manager is considering these mutual

Problem 3 (continued) A pension fund manager is considering these mutual funds. The first is a stock fund, and the second is a long-term government and corporate bond fund. The characteristics of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15% 32% Bond fund (B) 9 23 The correlation between the fund returns is 0.10. a) What is the expected return and standard deviation for the minimum variance portfolio (MVP)? b) If the fund-returns are perfectly negatively correlated, what is the return on the minimum variance portfolio? (5 points)

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