Question: Question= 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

Question= 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 a sure rate of 5.3%. The probability distributions of the risky funds are:

	Expected Return	Standard Deviation
Stock fund (S)	14%	43%
Bond fund (B)	7%	37%

The correlation between the fund returns is .0459.

What is the reward-to-volatility ratio of the best feasible CAL?

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