Question: Question #2 (10 points) A pension fund manager is considering investing in two funds to be included in the pension plan's current portfolio, which is

Question #2 (10 points) A pension fund manager is considering investing in two funds to be included in the pension plan's current portfolio, which is a well-diversied portfolio as proxied by the Russell 3000 index. The font fund under consideration is a growth stock fund the second a value stock fund. The expected return, standard deviation, standard deviation of residuals, and beta of the funds are as follows: Expected Standard Beta Standard return Deviation deviation of residuals WWW) Value fund (V) The correlation between me two fund returns is .30. The market risk premium is expected to be 6% and the risk-free rate is 1%

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